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There was a change in regulations in May 2020 which changed how banks classified some deposit accounts which effectively changes how the Fed defined M1 money.
by rmah 6y ago
There was a change in regulations in May 2020 which changed how banks classified some deposit accounts which effectively changes how the Fed defined M1 money. IIRC, it was related to what sorts of liquid deposits were counted as M1 vs not M1. Either way, IMO, the more important number to watch is M2 money.
- PragmaticPulp 6y agoYes, the M1 now includes some components that were previously only counted in M2: > This suggests that the rapid acceleration in M1 since May 2020 is mainly from money moving out of the non-M1 components of M2 into M1, rather than reflecting any acceleration in the demand for transaction balances. The chart looks shocking without context, but it’s also very misleading without the context.