A historic scene in the United States: the first negative growth in M2 history in December

Data show that M2, an important measure of the U.S. money supply – including money in circulation, money market fund balances and savings deposits – has been slowing for the past two years after surging in 2020, and rose in December. Turned down. The year-on-year growth rate of US M2 in December was -1.3%, which is the lowest level since the Federal Reserve began to track this indicator in 1959. This is also the first decline in US M2 in all available data. | Related Reading (Wall Street Insights)

Jue Kui

In the past year, the Federal Reserve has continuously raised interest rates. In fact, the US inflation rate and other economic data have shown that the inflation situation in the United States is slowing down. Looking at the previous meaning of the Fed, it may stick to the 2% inflation target. However, the M2 data with a year-on-year growth rate of -1.3% has not appeared for many years. Regardless of whether the inflation rate can reach 2%, the money supply has fallen to a very low level, and the savings in the hands of residents It is also shrinking considerably. For the Fed, this is a point of time for a policy change and a slowdown in rate hikes.

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