Cash is flowing into short-term U.S. government debt funds atthe fastest pace in more than six months, just when you mightexpect investors to be running for the exits.

Demand is surging even as lawmakers wrangle with a loomingdebt-ceiling deadline and investors become concerned about theTreasury missing payments on the securities held in most of thefunds. More than $75 billion was deposited in governmentmoney-market funds in the four weeks ended Aug. 16, compared withoutflows of about $18.5 billion from U.S. exchange-traded andmutual funds, Investment Company Institute data show.

Whether investors are seeking a refuge from geopolitical risksor having cold feet over the sustainability of the record rally instocks, they're benefiting from safeguards put in place in Octoberto prevent a repeat of the run on money-market funds experiencedduring the financial crisis. The changes prompted a shift of morethan $1 trillion to government funds from what are known as primefunds by more risk-tolerant investors in the run-up to thereforms.

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