Company borrowing through short-term IOUs has shrunk to the lowest level since 2012 as money-market funds continue to pull back amid low yields due to the Federal Reserve’s easy money policy.

The seasonally adjusted amount of U.S. commercial paper decreased for a fifth straight week to $964 billion outstanding in the period ending Wednesday, according to Federal Reserve data. Corporations sell commercial paper, typically maturing in 270 days or less, to fund everyday activities such as rent and salaries.

Declining demand from money-market funds, among the biggest buyers of the debt, is curbing commercial-paper sales. Total assets in the funds have fallen by $100 billion this year to $2.6 trillion on May 13, according to the Investment Company Institute. The total has dropped from $2.7 trillion on Dec. 31, the highest level since June 2011.

“There is no point trying to be a hero at these yield levels, so investors are in a wait-and-see mode, waiting for rates to move higher,” said Joseph Abate, a strategist at Barclays Plc in New York. “Money markets are shortening their exposure so investors are keeping their powder dry until it becomes more attractive.”

The Fed is debating when to increase its benchmark interest rate from its current zero to 0.25 percent range as the economy shows uneven signs of growth. Fed officials last month didn’t expect to raise rates at their next meeting in June even as they concluded that a first-quarter economic slowdown was unlikely to persist, minutes of the meeting showed on Wednesday.

Commercial paper sold by non-U.S. financial institutions fell to $229.6 billion, the lowest level since the period ended August 2014, while the amount issued by U.S.-based banks decreased by 6.8 percent since last week to $256.6 billion, the smallest amount in about a month.


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