4 ms·

Is this hockey stick a factor? https://fred.stlouisfed.org/series/WM1NS https://fred.stlouisfed.org/series/WM1NS In the “modern economy”, “modern economists”

Is this hockey stick a factor? https://fred.stlouisfed.org/series/WM1NS https://fred.stlouisfed.org/series/WM1NS In the “modern economy”, “modern economists” seem to say it’s not a factor. But gosh, just look at it.

grumple 4y ago
Not even a little. Read the notes, they significantly changed what they were measuring in 2020. It added savings accounts and money market accounts in 2020.
hartator 4y ago
Of course not. 5x the money supply in 3 years couldn’t have caused price inflation. /s
formerly_proven 4y ago
Uh that's an accounting change iirc - they included some category worth 10 trn in M1 on that cut-over day, 10 trn/day slope is not an actual change in money supply. Edit: > Before May 2020, M1 consists of ... (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions. > Beginning May 2020, M1 consists of ... (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). > Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately. This means the balance of all savings accounts was added to M1 beginning may 2020. If you want to look at "money printed", look at M2. AIUI the definition of M2 was not changed that date and you can indeed see some ~2 trn covid stimulus spread out over a few months in M2.
- refurb 4y ago
  That's true, but post-2020, the money supply went up 25% in the span of 20 months.
  - krferriter 4y ago
    Between June 1, 2020 and Feb 1, 2023 (31 months), M1 increased by 18.79%. Annualized, this is +6.68%/year.
  - deleted 4y ago
    [deleted]
- intalentive 4y ago
  Ok, assuming that the 11T jump (from 5T to 16T) in May 2020 was entirely due to an accounting change, that still puts us at over roughly 10T today by the former accounting. Or a doubling in 3 years. Coincidentally there’s been a rough doubling in the size of the Fed’s balance sheet, with a familiar spike in 2020. https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL

grumple 4y ago

Not even a little. Read the notes, they significantly changed what they were measuring in 2020. It added savings accounts and money market accounts in 2020.

hartator 4y ago

Of course not. 5x the money supply in 3 years couldn’t have caused price inflation. /s

formerly_proven 4y ago

Uh that's an accounting change iirc - they included some category worth 10 trn in M1 on that cut-over day, 10 trn/day slope is not an actual change in money supply. Edit: > Before May 2020, M1 consists of ... (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions. > Beginning May 2020, M1 consists of ... (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). > Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately. This means the balance of all savings accounts was added to M1 beginning may 2020. If you want to look at "money printed", look at M2. AIUI the definition of M2 was not changed that date and you can indeed see some ~2 trn covid stimulus spread out over a few months in M2.

refurb 4y ago
That's true, but post-2020, the money supply went up 25% in the span of 20 months.
- krferriter 4y ago
  Between June 1, 2020 and Feb 1, 2023 (31 months), M1 increased by 18.79%. Annualized, this is +6.68%/year.
- deleted 4y ago
  [deleted]
intalentive 4y ago
Ok, assuming that the 11T jump (from 5T to 16T) in May 2020 was entirely due to an accounting change, that still puts us at over roughly 10T today by the former accounting. Or a doubling in 3 years. Coincidentally there’s been a rough doubling in the size of the Fed’s balance sheet, with a familiar spike in 2020. https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL