Economic Indicators: H.6 Money Stock Measures
The H.6 Money Stock Measures (“Money Supply”) is released every Thursday at 4:30 pm. The Money Supply release lags the most recent money-stock figures, which consist of data for the week ending on Monday, by two calendar weeks. The Money Supply report is compiled by the Federal Reserve Board of Governors and revisions are provided for prior releases.
The Money Supply release reports the recent and historical levels of the M1 and M2 monetary aggregates as well as their components. As primarily described by the Federal Reserve, the components of M1 are the following: (1) currency not in the U.S. Treasury, (2) Federal Reserve Banks, and the vaults of depository institutions; (2) nonbank issued traveler’s checks; (3) commercial bank demand deposits less the cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits. Meanwhile, the components of M2 are the following: (1) all of M1; (2) savings deposits, which includes money market deposit accounts; (3) time deposits that are smaller than $100,000 less individual retirement accounts and Keogh balances at depository institutions; and (4) balances in retail money market mutual funds, less individual retirement accounts and Keogh balances at the money market mutual funds. The Money Supply release also included smoothed figures using 13-week and four-week moving averages. Furthermore, the Money Supply figures are presented as both seasonally adjusted and not seasonally adjusted. On the Federal Reserve’s website, one can obtain the historical levels of the monetary aggregates on a monthly basis back to January 1959, while weekly data is only available to January 1975.
The most recent Money Supply report can be accessed from the Federal Reserve’s website.
Historically, market participants have relied more on the level of the federal funds rate to understand current monetary policy. However, recently with the federal funds rate being reduced to nearly zero in December 2008, these market participants have sought additional means of monitoring the quantitative easing process. As a result, the Money Supply release now garners more attention than it had previously. The Money Supply release helps all investors understand the magnitude of the liquidity injected into the economy and draw their own conclusions on its effects.
Chain Bridge Investing (“we” or “CBI”) states at the outset that the opinions, judgments and derivation of thinking in this writing are solely Chain Bridge Investing’s. It is imperative that any judgment or valuation you take from information dispersed by CBI be examined within the context of your portfolio investment and overall objectives. To that end we urge you to contact your investment advisor or portfolio manager to insure that the information or suggestions proposed by CBI conforms to your needs and financial strategy.
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Tagged with H.6 Money Stock Measures, M1, M2, Money Supply
