7 ms·
I am kind of confused by those graphs: how did M1 rise so much but M2 stay approximately the same over the last year? M2 rose by 3T, and M1 rose by 13T(!).
by eindiran 5y ago
I am kind of confused by those graphs: how did M1 rise so much but M2 stay approximately the same over the last year? M2 rose by 3T, and M1 rose by 13T(!).
- gowld 5y agoFed says it's mainly a paperwork thing, with M2 savings accounts and CD accounts being reclassified as M1 checking accounts. But they say they can't think of a reason why it's happening, which is kind of scary. They also say that since insterest rates are 0, there's no reason for depositors to prefer M3 over M1. https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
- eindiran 5y agoThat's very helpful, thank you.