2 ms·

How did the M1 supply increase $12+ trillion? That's surprising to me, especially when it doesn't include bank reserves, and anyway it's much more than even the

• onlyrealcuzzo 5y ago
  The Fed's balance sheet increased by $4T. Federal deficit was $3.1T Bank lending for mortgage originations increases M1 - this increased by over $1T. Total = $8.1T Since the Fed bought most of the government's debt, though, a lot of that $3.1T government deficit should be included in the $4T balance sheet increase of the Fed. So this could possibly only account for half of it. I'm not sure. Other personal debt (which includes auto loans) isn't even up another $1T. Margin debt in stocks is up $260Bn. Anyone else know what the rest is?
• mywittyname 5y ago
  TL;DR: the federal reserve board did away with a requirement on the classification of certain bank accounts, causing savings accounts and checking accounts to be reported as the same. 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... > In any case, it seems that the modification of Regulation D in late April has effectively rendered savings accounts almost indistinguishable from checking accounts from the perspective of depositors and banks. Accordingly, the composition of M2 between M1 and non-M1 components conveys little economic information.