The Fed Has Already Eased. The Money Supply Will Trend Higher This Year.
We will get updated money supply figures Tuesday at noon. M1 and M2 will be significantly higher by the end of the calendar year, a money supply expansion process that kicked off in November 2023. The Fed has already eased.
Money supply data used to be released on a weekly basis, but the Fed changed that release schedule when it knew it would inflate the money supply for multiple years in response to the COVID lockdowns (some of the worst social policy since FDR’s Japanese internment camps). The Fed did not want the public to beat it over the head with weekly money supply data, so it simply took that data away - like the CEO who pulls back on financial metrics once they are no longer favorable (ex. Apple’s Tim Cook taking device unit sales data away).
Our view is that the money supply began a general upward trend in November (see table below). While the money supply may plateau or move down slightly on a weekly basis, the general upward trend will continue during 2024. When one considers the Federal Government’s fiscal spending levels, the Fed will be forced to subsidize some of Treasury’s forthcoming auction activity, which by definition will grow the money supply.
