This price hike has occurred after the rejection of the $700 plan for the financial industry, which panicked most traders in the trade. 

Though the central banks have pumped in billions to the banking industry in order to avoid the rates going up further, the panic will simply not go due to the predication of the consequential risk that might catch up the financial industry due to the recent rescue package bill rejection.

“Money market funds are not being viewed by investors as the safe havens they used to be.” Debra Brochardt.

Retail investors have already pulled back $7.27 billion thus decreasing the funds to lower than $1.237 trillion and the pull back is still round the scene.

The breaking of the buck by the Reserve Primary Fund 2 weeks ago induced anxiety with everyone that is maintaining savings in the money market and with the trends going worse we are realizing that things can again be as worse.  Even the most secure markets can go broke.

“We learned (again) that banks and brokerages can fail, insurers can go broke and even ultra-safe money-market funds can lose value.” remarks Dan Kadlec.

Being one of the broadest asset classes; the stocks will recover, though the shares of the stressed financial companies might or might not.

Although the Reserve Fund does not promise against asset losses from stocks or bonds and has put only a temporary assurance on losses from money-market funds, it does not assure that your deposits or securities will be returned to you if an institution fails. The limit is $100,000 on deposits for per person per bank.  It is $250,000 for deposits in retirement accounts.  It is $500,000 in brokerages for each unique account per institution. In cases of a revocable trust or POD (payable on death) account, there is a guaranteed up to $100,000 per named beneficiary.

Money markets are known to be filled with financial risk. Since prices are rapidly falling it does not mean that you will have to sell all your securities and put your money under the mat.

"You will not look back at this period and say, 'I had too much money in reserve, and look what it cost me.' " states William Jordan, the president of the Sentinel Group situated in financial planners in Laguna Hills, California.