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With interest rates coming down, analysts James Wooden and Jerome Baron of Merrill Lynch, Pierce, Fenner & Smith predict that the growth rates of the money-market funds will begin to peak. They note that during the spring to fall of 1980, a period of credit controls, the proportion of money-market certificates as a percentage of total deposits declined, while 2 1/2-year, variable-rate certificates increased as investors lengthened maturities. At the same time, the assets of the money-market mutual funds actually declined.

Mr. Wooden and Mr. Baron believe there have already been some positive signs, indicating a possible cyclical peak in interest rates. These include a recent slowing of the monetary aggregates; a decline in the prices of commodities considered inflation hedges; and a slowdown in corporate loan demand. Of course , there is another school of thought that argues that this is the trough before interest rates surge this fall.

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