In the seven days leading up to February 1st, U.S. bond funds saw money inflows for a fourth consecutive week in anticipation of a pause in rate hikes as the country's economy battled a downturn.

According to Refinitiv Lipper data, investors bought U.S. bond funds for a net $197 million, a significant decrease from the $4.84 billion in net purchases made the week prior.

In a widely anticipated action on Wednesday, the Fed increased its benchmark overnight lending rate to a range of 4.5% to 4.75%. However, Fed Chair Jerome Powell appeared to adopt a more dovish stance during a news conference.

Municipal bond funds saw inflows of $438 million from investors, but U.S. taxable bond funds saw outflows of $252 million, the first weekly net selling in five weeks.

The largest inflow in three weeks went to U.S. short/intermediate investment-grade funds at $2.81 billion, while net purchasing went to U.S. emerging markets debt funds at $273 million.