Money-market fund assets fell from a record high ahead of a quarterly tax date and likely portending a pivot in flows as prospects of interest-rate cuts next year prompt investors to seek higher returns in other assets.

About $11.6 billion flowed out of US money-market funds in the week through Dec. 13, according to Investment Company Institute data. Total assets dropped to $5.886 trillion from $5.898 trillion the week prior, the first decline since the week ended Oct. 18.

Retail investors have been piling into money funds since last year, when the Federal Reserve began one of the most-aggressive tightening cycles in decades. But this week, the Fed signaled that campaign is over by projecting deeper interest-rate cuts in 2024. For Jeffrey Rosenberg, a portfolio manager at BlackRock Financial Management, that spells a pivotal moment for cash.

“This is a turning point and you do start to see money move out of money markets, into riskier assets, into term rates to lock in higher rates,” he said in a Bloomberg Television interview. “As cash rates start to come down, you’re penalized in 2024 for holding cash because the rates and the prospect of the rates is to go lower.”

This week, while officials kept their main policy rate unchanged for the third straight meeting between 5.25% and 5.5%, the highest in 22 years, their updated quarterly forecasts showed they expect to lower rates by 75 basis points next year, a sharper pace of cuts than indicated in September. Chair Jerome Powell didn’t foreclose on the possibility of hiking again if price pressures return, but he indicated policymakers are now turning their focus to when to cut rates as inflation continues its descent toward their 2% goal.

In a breakdown for the week to Dec. 13, government funds — which invest primarily in securities like Treasury bills, repurchase agreements and agency debt — saw assets fall to $4.8 trillion, an $11.4 billion decline. Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile, saw assets climb to $948 billion, a $1.4 billion increase.

This article was provided by Bloomberg News.