CFS Divisia money growth soared across the board – hitting a historic high not witnessed in the 53-year period analyzed by our Advances in Monetary and Financial Measurement (AMFM) team. CFS Divisia M4, which is the broadest and most important measure of money, grew by a record 22.0% in April 2020 on a year-over-year basis versus an unrevised 10.0% in March 2020.
Today’s release represents the first time that all of our monetary aggregates reached new records.
In the last month, since our highlighting a future of nuanced changes surrounding the inflation versus deflation debate, a surge of articles and pieces have appeared.
Disinflation will likely dominate in the near term with jobless claims hitting highs and oil prices remaining relatively low for an extended period of time. Nonetheless, the passthrough from monetary policy into inflation is meaningfully more complex than often thought. My remarks at the Society of Economic Measurement conference in Thessaloniki shed some light on the interplay between CFS Divisia Money and inflation over time – http://centerforfinancialstability.org/research/why_cfs_divisia_071316.pdf
Our data suggest that recent monetary measures will prove far from costless. Higher inflation is likely in coming months.
For Monetary and Financial Data Release Report:
Bloomberg terminal users can access our monetary and financial statistics by any of the four options:
1) ALLX DIVM
2) ECST T DIVMM4IY
3) ECST –> ‘Monetary Sector’ –> ‘Money Supply’ –> Change Source in top right to ‘Center for Financial Stability’
4) ECST S US MONEY SUPPLY –> From source list on left, select ‘Center for Financial Stability’