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| Economy |
| The Money Supply Points to Higher for Longer Inflation |
| 2023-03-30 |
| [Breitbart] Why has inflation been so stubbornly persistent this year? One reason may be that the money supply stayed elevated for even longer than previously thought. The Federal Reserve on Wednesday released its estimate of the money supply on Tuesday. It showed that M2—a broad measure of money supply in the economy that includes savings deposits, currency in circulation, and balances in retail money-market funds—fell 0.6 percent in February, a decline of $12 billion from $21.1835 trillion in January to $21.0625 trillion. There was also a very notable revision to the prior month. The preliminary estimate for M2 in January had shown an increase of $30.9 billion compared with December. The revised figure shows a contraction from December to January of $141.7 billion. This comes from a significant upward revision to the December estimate of M2 from $21.2362 trillion to $21.3252 trillion and a downward revision for the January estimate from $21.2671 trillion to $21.1835 trillion. This means that the money supply had been higher around the end of the year than was thought, which could go some of the way to explaining why inflation was surprisingly resurgent as this year kicked off. The much bigger decline than previously thought as the year started could also be part of what has roiled banks. Deposits are not just fleeing because investors are seeking higher interest on their money or are panicked over the health of banks. The money supply was contracting rapidly in January and February. |
| Posted by:Besoeker |
| #1 I continue to be surprised the US dollar and the US economy still survives. |
| Posted by: Gromble Dribble4342 2023-03-30 11:58 |