Outflows from money market funds that invest in ultra-safe securities totaled about $37.5 billion over the past week. It's the largest weekly drop so far this year. Meanwhile, borrowers in the repurchase market are demanding higher yields. Concerns are mounting that if the U.S. credit rating is downgraded, the value of Treasurys used as collateral in the repo market could respond in kind. "The repo market is a pressure point because it can have an impact on overall credit availability, which bleeds through to mortgage rates," said Robert Toomey, managing director at SIFMA. "Treasurys become a little less attractive if they are more expensive to finance." Listen to SIFMA's media briefing on the debt ceiling.

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