Is Cash on the Sidelines at a 2000-Era Low? Recomputing the $7.9 Trillion Ratio from Fed Data

Money market funds hold a record $7.90 trillion, according to the Investment Company Institute's weekly report for the week ended October 28, 2026. But a dollar total cannot say whether cash is high or low; only a ratio can, and a ratio has two sides that have to be measured on the same date and from the same publisher. Rebuilt that way from the Federal Reserve's own releases, cash was 25.5% of the market value of domestic corporate equities at 2026:Q2 - the lowest reading in the 214 quarters since 1973, and lower than every quarter of the 2000 peak. This post takes that one number apart piece by piece, because an earlier version of it published here used a market-value figure of $79.7 trillion that does not appear in the Fed data it was credited to.

Key takeaways

ICI puts money market fund assets at $7,901.28 billion for the week ended October 28, 2026, down from $7,944.57 billion on October 21 and $7,923.08 billion on October 14.
Cash measured as money fund assets plus commercial bank deposits was $27.83 trillion at 2026:Q2, against $109.24 trillion of domestic corporate equities at market value: a ratio of 25.5%.
That is the lowest of the 214 quarters from 1973:Q1 through 2026:Q2. The lowest reading before 2026 was 27.5% in 2000:Q1, and the highest was 126.5% in 1982:Q2.
The newest Z.1 release is dated September 11, 2026 and carries 2026:Q2 data; the next is scheduled for December 10, 2026. Any "cash versus market cap" figure built on 2026:Q1 is one release out of date.

Figures checked: November 4, 2026.

The ratio, and the four pieces it is built from

"Cash on the sidelines as a share of the stock market" looks like a single statistic. It is four separate decisions: what goes in the numerator, which published series stands for the market's value, which date each side is read on, and how far back the same formula can be run. Change any one and the answer moves by several percentage points. The table below shows the four pieces as the earlier version of this post had them, next to what the primary releases say.

Piece	Figure used before	What the primary source gives	Publisher
Numerator: money funds	$7.90 trillion, week ended Oct 28, 2026	$7,901.28 billion, week ended Oct 28, 2026 (confirmed)	ICI, weekly MMF assets
Numerator: cash total	"roughly $27.3 trillion"	$27.83 trillion at 2026:Q2; $27.28 trillion at 2026:Q1	Fed Z.1 (money funds) + H.8 (bank deposits)
Denominator: equity value	$79.7 trillion, credited to Z.1 2026:Q1	No Z.1 corporate-equity line equals $79.7 trillion at 2026:Q1 (see next section)	Fed Z.1, table L.223
Vintage	Z.1 2026:Q1, released June 11, 2026	Z.1 2026:Q2, released September 11, 2026	federalreserve.gov/releases/z1
Resulting ratio	34%, four-quarter average 33.3%	25.5% at 2026:Q2; 29.3% at 2026:Q1; four-quarter average 27.7%	Calculated here from the series above

The numerator: $7.90 trillion inside $27.8 trillion

The money fund figure holds up exactly. ICI's weekly release for the week ended October 28, 2026 reports $7,901.28 billion, of which government funds are $6,504.59 billion, prime funds $1,235.63 billion and tax-exempt funds $161.06 billion. It is also already falling at the margin: the series printed $7,923.08 billion on October 14 and $7,944.57 billion on October 21, so the October 28 reading is $43.29 billion below the October 21 peak. A record total that has declined for a week is a reminder that weekly money fund data is flow data, not a stock of pent-up buying power.

The wider cash number needs a second release. Deposits at all commercial banks, from the Fed's H.8, were $19,771.12 billion in the week ended October 21, 2026 (the prior week was $19,802.79 billion). Adding the Z.1 measure of money fund assets for 2026:Q2, $8.44 trillion, to quarter-end bank deposits gives $27.83 trillion of cash at 2026:Q2 and $27.28 trillion at 2026:Q1. The "roughly $27.3 trillion" in the earlier version is therefore a 2026:Q1 number, which matters in a moment, because it was being divided by a figure labelled 2026:Q1 but equal to neither quarter.

The denominator: which "market value" Z.1 actually publishes

This is where the earlier figure fails. Z.1's table L.223 carries corporate equities at market value in several lines, and they are far apart. None of them is $79.7 trillion at 2026:Q1.

Z.1 corporate-equity line (market value)	2026:Q1	2026:Q2
Nonfinancial corporate business, liability (FRED NCBEILQ027S)	$70.02 trillion	$83.05 trillion
Domestic financial sectors, liability (FRED BOGZ1LM793164105Q)	$23.02 trillion	$26.19 trillion
All domestic sectors, the two lines above combined	$93.04 trillion	$109.24 trillion
All sectors, asset side, including equities held through funds (FRED BOGZ1LM893064105Q)	$106.04 trillion	$123.69 trillion

$79.7 trillion sits in the gap between the narrowest line and the domestic total, which is exactly where a figure lands when it comes from somewhere else - an index provider's total market capitalization, for instance - and is then credited to the Fed. The only source listed for it in the earlier version was an aggregator post dated August 17, 2026 that summarized Fed and ICI data rather than publishing it. That link has been removed. A number cannot be attributed to a release that does not contain it, even when the release is the ultimate source of the underlying data.

The choice made here is the all-domestic-sectors total, $109.24 trillion at 2026:Q2. It counts equities issued by U.S. corporations, financial and nonfinancial, and avoids the double counting in the all-sectors asset line, where the same share can appear once directly and again inside a fund. Readers who prefer the nonfinancial-only line will get a higher ratio, 33.5% at 2026:Q2, and that is a legitimate alternative as long as the same line is used for every year in the history.

The vintage problem, and the history when both sides share a date

An October cash number over a March market value is not a ratio; it is two different dates. Between 2026:Q1 and 2026:Q2 the domestic equity total rose from $93.04 trillion to $109.24 trillion, or 17.4%. Holding the numerator at its October level while leaving the denominator in March therefore inflates the result by roughly a sixth - which is most of the distance between 34% and 25.5%.

Measured on matching dates, the series runs from 1973:Q1 to 2026:Q2, 214 quarters, and the latest reading is the lowest of all of them. The nine most recent quarters show how fast the decline came: it is a denominator story, not a cash-withdrawal story, because cash kept rising in dollars the whole way.

Quarter	Cash / domestic equity value	Quarter	Cash / domestic equity value
2024:Q2	32.0%	2025:Q3	28.1%
2024:Q3	30.7%	2025:Q4	28.0%
2024:Q4	30.6%	2026:Q1	29.3%
2025:Q1	32.2%	2026:Q2	25.5%
2025:Q2	29.8%	Four-quarter average	27.7%

The long history is where the earlier version was closest to right and still needs correcting. Its 1982 peak of "118%" is reproducible: on this formula 1982:Q3 is 118.7%, and the actual high is 126.5% in 1982:Q2. Its claim of a prior all-time low of 31.4% in 2000:Q3 is not reproducible - that quarter comes out at 29.5%, the lowest pre-2026 reading is 27.5% in 2000:Q1, and 2000:Q4 is 34.1%. The practical consequence is the opposite of what the earlier framing implied: today's reading is not approaching the 2000 low from above, it is already below it.

Period	Cash / domestic equity value	What the period was
1982:Q2	126.5% (series high)	Cash worth more than the entire domestic equity market, at the end of the 1970s inflation decade
1982:Q3	118.7%	The quarter the 1982-2000 bull market began
2000:Q1	27.5% (pre-2026 low)	The quarter the Nasdaq peaked
2000:Q3	29.5%	Four quarters into the decline
2026:Q2	25.5% (series low)	Latest Z.1 quarter
Decade averages	1970s 89.8%, 1980s 92.2%, 1990s 52.6%, 2000s 47.9%, 2010s 47.3%, 2020s 35.9%	The ratio has fallen in every decade since the 1980s

What the corrected number does and does not settle

Two readings of 25.5% are available, and they are not the same claim. The first is descriptive and solid: relative to what equities are now worth, the cash held in money funds and bank deposits is smaller than at any point in the 53 years the two releases overlap, and it got there mainly because equity values rose 17.4% in a single quarter rather than because households spent their deposits. The second reading is predictive, and the data above cannot support it. One observation at a series low says nothing about the next four quarters; 2000:Q1 was followed by a long decline, and 1982:Q3's 118.7% was followed by an 18-year advance, which is two data points pointing in opposite directions and no distribution to speak of.

There is also a real argument on the other side of the measurement itself. The dollar total is what a fund manager can actually move, and $27.83 trillion of it earning something close to the 3-3/4 to 4 percent target range the FOMC left unchanged on October 28, 2026 is a genuine competitor to equities in a way that the same ratio in 1999 was not, when the denominator was smaller but the alternative yield was similar. A ratio compares cash with equity prices; it does not compare cash with the return on holding cash. Both measurements are incomplete on their own, and the cheaper mistake for a long-horizon reader is probably to treat neither as a timing signal: if the ratio is read as a reason to act, it has been at or near a record low for three quarters already, and acting on it in 2025:Q4 at 28.0% would have meant selling into the quarter that followed.

Nothing here is a personalized recommendation to hold more or less cash. Investors with specific allocation questions should weigh their own time horizon and risk tolerance, and consult a licensed financial professional for individualized advice.

Tip: Rebuilding a ratio like this one from two Fed releases is a worksheet exercise, and readers who want to keep their own version of it usually end up with a financial calculator and a notebook rather than a chart service. (These are Amazon Associate links - we may earn a small commission on qualifying purchases.)

FAQ

Is $7.9 trillion in money market funds actually a record?

Yes, in dollars. ICI's weekly series reports $7,901.28 billion for the week ended October 28, 2026, the highest level the series has recorded. It is also $43.29 billion below the October 21 reading of $7,944.57 billion, so the record and a weekly decline are both true.

So is cash on the sidelines high or low right now?

Low, relative to equities. Cash of $27.83 trillion against $109.24 trillion of domestic corporate equities at 2026:Q2 is 25.5%, the lowest of the 214 quarters since 1973:Q1. In dollars it is the largest cash pile ever measured. Both statements describe the same two numbers.

Why did the ratio in this post change from about 34% to 25.5%?

Two reasons. The earlier version divided an October 2026 cash figure by a market value labelled 2026:Q1, and the figure it used, $79.7 trillion, is not one of the Z.1 corporate-equity lines for that quarter: those are $70.02 trillion (nonfinancial), $93.04 trillion (all domestic) and $106.04 trillion (all sectors, asset side). Using matching dates and the all-domestic line gives 29.3% for 2026:Q1 and 25.5% for 2026:Q2.

Does a record-low cash ratio mean stocks are about to fall?

The data here cannot answer that. The two nearest historical extremes point opposite ways: 2000:Q1's 27.5% preceded a long decline, and 1982:Q3's 118.7% preceded an 18-year advance. The ratio has also been below 30% for four of the last five quarters, so it is not a dated signal that just appeared.

Why do different sources report different "cash on the sidelines" numbers?

Because the numerator can be money funds alone, money funds plus bank deposits, or those plus Treasury bills, and the denominator can be any of the four Z.1 equity lines above or an index provider's market capitalization. The combination used here is stated in full so the arithmetic can be repeated: Z.1 money fund assets plus H.8 commercial bank deposits, over Z.1 domestic corporate equities at market value.

How current is this data?

The money fund figure is the week ended October 28, 2026. The quarterly sides come from Z.1 released September 11, 2026, covering 2026:Q2; the next Z.1 release is December 10, 2026, and will carry 2026:Q3. Bank deposits are the H.8 week ended October 21, 2026.

Correction November 4, 2026: the market value of U.S. corporate equities was given as $79.7 trillion credited to the Fed's Z.1 release, and the resulting cash ratio as about 34% with a four-quarter average of 33.3% and a prior all-time low of 31.4% in 2000:Q3. Z.1's corporate-equity lines for 2026:Q1 are $70.02 trillion, $93.04 trillion and $106.04 trillion, none of them $79.7 trillion; recomputed on matching dates from Z.1 and H.8, the ratio is 29.3% for 2026:Q1 and 25.5% for 2026:Q2, the four-quarter average is 27.7%, and the lowest pre-2026 reading is 27.5% in 2000:Q1. The aggregator post that carried the original figures has been removed from the sources, and the stale 2026:Q1 vintage has been replaced with the 2026:Q2 release of September 11, 2026 (Federal Reserve Z.1 and H.8; Investment Company Institute).

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