As the fed approaches its September meeting, the yield on two-year treasury bonds is close to 4 per cent for the first time in 15 years, while yields on some money market funds have already reached 2 per cent and are likely to rise further. In early 2022, these yields were around zero.

The Fed's interest rate hike has helped savers who have suffered from short-term yields below 1 per cent for most of the past 15 years, and savers are likely to end up with positive inflation-adjusted yields in the coming year. Additional gains from large pools of money market funds and other short-term bond assets could also boost the economy.

For companies, other beneficiaries of higher short-term interest rates include cash-rich companies, such as$Berkshire Hathaway-A (BRK.A.US)$、$Apple (AAPL.US)$、$Alphabet-A (GOOGL.US)$和$Microsoft (MSFT.US)$。

At the end of June, for example, Berkshire was sitting on more than $100 billion in cash and equivalents, including about $76 billion in US Treasuries. Risk-averse chief executive Warren Buffett (Warren Buffett) prefers to invest most of Berkshire's cash in US Treasuries.

Currently, Berkshire's cash holdings earn more than $3 billion a year, while Treasury yields were almost zero in 2021, hovering just above zero. As of June 30, Apple Inc held $179 billion in cash and equivalents, Microsoft Corp held $105 billion and Alphabet held $125 billion (including marketable securities).

The rise in interest rates on short-term bonds and funds reflects the Fed's move to raise interest rates this year, which is expected to rise by 75 basis points at its September policy meeting next week. Bond market participants expect the federal funds rate to exceed 4 per cent by the end of the year, according to the CME FedWatch tool.

"investors realise that as the Fed raises interest rates, there will be a rotation in the ETF portfolio and bonds in the portfolio will perform more strongly," said Steve Laipply, US head of bond ETF at Blackrock. This should raise yields on ETF bonds, especially those with shorter maturities, he said.

So far this year, investors have poured money into ETF Treasuries to take advantage of the sharp rise in yields. For example, iShares SHV ETF has inflows of $10 billion this year, while iShares SHY ETF has inflows of about $6 billion, according to iShares.

Money market fund yields are also rising. The $216 billion pioneer federal money market fund (Vanguard Federal monetary Market Fund, VMFXX) currently yields 2.15% at the SEC, and that yield is likely to continue to rise.

At the same time, risky assets such as US stocks have performed poorly recently. Ava Trade analyst Naeem Aslam said the market will be volatile between now and next week's Fed meeting. Mixed economic data and stubbornly high inflation have made the Fed's job harder, but he said talk of raising interest rates by 100 basis points may have gone too far. But the Fed is likely to raise another 75 basis points-to the chagrin of the market.

Edward Park, chief investment officer of Brooks Macdonald, said: "it seems that the Fed must have faith in the task of fighting inflation, and they are unlikely to shift their goal to stabilizing economic growth. "

Still, Park said he expects U. S. stocks to rise in the coming weeks. He said investors are ready for the Fed to raise its main interest rate by 75 basis points this month. If later statistics show a slowdown in inflation, investors had better not miss a rebound in US stocks that could follow the October data, he added.