M2 Money Supply has just hit its highest level (M/M annualized increase, seasonally adjusted) since the post September 11th, 2001 period.

The Federal Reserve is increasing liquidity as a cushion to offset upcoming rate hikes. Inflation fears led M2 growth to slow Q4 2003 and early 2004. Liquidity increased in February, March and April ~10% (month over month annualized) before spiking in May to the highest levels since the post 9/11 period.

May M2 Spike (m/m annualized)
m2_post_9.11
Source: Dallas Federal Reserve

In addition to the usual gyrations, Money Supply seems to spike every 4 years — just before the Presidential elections; Call it a perk of incumbency . . .

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Quote of the Day:
“Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand something better than others, they have an edge”
-George Soros

Category: Finance

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