CFS Monetary Measures for February 2017

Today we release CFS monetary and financial measures for February 2017. CFS Divisia M4, which is the broadest and most important measure of money, grew by 4.1% in February 2017 on a year-over-year basis versus 4.8% in January.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Feb17.pdf

For more information about the CFS Divisia indices and the data in Excel:
http://www.centerforfinancialstability.org/amfm_data.php

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’

An Interview with William A. Barnett

CFS Director William A. Barnett is interviewed by Apostolos Serletis.  The conversation covers Bill’s life as a rocket scientist, work at the Federal Reserve Board, pioneer of monetary aggregation and complex dynamics, founding journals and societies, work at CFS, and more.

The interview is similar in construct to discussions with eminent economists in Bill’s book co-edited with Nobel Laureate Paul Samuelson – “Inside the Economist’s Mind.”

To view the full interview:
http://centerforfinancialstability.org/research/Barnett_Interview.pdf

I hope that you find the exchange about Bill and his remarkable career informative and enjoyable.

CFS Monetary Measures for January 2017

Today we release CFS monetary and financial measures for January 2017.  CFS Divisia M4, which is the broadest and most important measure of money, grew by 4.9% in January 2017 on a year-over-year basis versus 5.1% in December 2016.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Jan17.pdf

For more information about the CFS Divisia indices and the data in Excel:
http://www.centerforfinancialstability.org/amfm_data.php

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’

CFS Monetary Measures for December 2016

Today we release CFS monetary and financial measures for December 2016. CFS Divisia M4, which is the broadest and most important measure of money, grew by 5.4% in December 2016 on a year-over-year basis versus 5.5% in November.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Dec16.pdf

For more information about the CFS Divisia indices and the data in Excel:
http://www.centerforfinancialstability.org/amfm_data.php

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’

Testimony on Monetary Policy

Mickey D. Levy (Chief Economist of Berenberg Capital Markets for the Americas and Asia) testified before the House Financial Services Committee on monetary policy.

He focused on how non-monetary factors including a growing web of government taxes, regulations and mandated expenses were harming the economy.

His line of thinking is of special note as these themes have been revealed over the years by CFS Divisia monetary aggregates and components.

His Testimony Resetting Monetary Policy is available online – http://financialservices.house.gov/uploadedfiles/hhrg-114-ba19-wstate-mlevy-20161207.pdf

CFS Monetary Measures for November 2016

Today we release CFS monetary and financial measures for November 2016.  CFS Divisia M4, which is the broadest and most important measure of money, grew by 5.4% in November 2016 on a year-over-year basis versus 5.8% in October.

CFS Divisia indices can be found on our website at http://www.centerforfinancialstability.org/amfm_data.php.  Broad aggregates are available in spreadsheet, tabular and chart form.  Narrow aggregates can be found in spreadsheet form.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Nov16.pdf

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’

Congress can help the Fed…

President-elect Donald Trump noted that “we have a very false economy,” due to the Fed “keeping the rates down.”  He is right.

Yet, the question remains how to exit from this policy while avoiding catastrophe in the bond market and building a safer monetary policy framework for the future.

The Fed needs to integrate state and bank money into the policy discourse, including its own reports to Congress and the public.

Here, Congress can help.

For full remarks:
http://centerforfinancialstability.org/oped/Fed_120616.pdf

Acceleration of Money Growth…

Today’s CFS Divisia M4 release highlights a meaningful acceleration of growth in monetary and financial aggregates.

A steady advance of CFS monetary data since the beginning of the year suggests either the economy is springing back to life, inflation is moving higher, or some combination of the two.

CFS Divisia M4 – the broadest and most important measure of money – grew by 5.8% in October 2016 on a year-over-year basis versus 5.4% in September and 4.0% at the beginning of the year.

Importantly, growth in the narrow aggregate CFS Divisia M2 advanced by a stunning 7.9% on a year-over-year basis in October.

Regulatory and global macro cross currents are reshaping the financial system. The impact of these broad changes readily explains the divergence between the broad and narrow aggregates.

CFS Divisia indices can be found on our website at http://www.centerforfinancialstability.org/amfm_data.php. Broad aggregates are available in spreadsheet, tabular and chart form. Narrow aggregates can be found in spreadsheet form.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Oct16.pdf

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’

Gain in money growth…

Today’s CFS Divisia M4 release highlights an acceleration of growth in monetary and financial aggregates. CFS Divisia M4 – the broadest and most important measure of money – grew by 5.5% in September 2016 on a year-over-year basis versus 4.9% in August and 3.6% a year ago.

Many regulatory and global macro cross currents are reshaping the financial system. The impact of these broad changes is resoundingly evident in CFS monetary data.

CFS Divisia indices can be found on our website at http://www.centerforfinancialstability.org/amfm_data.php. Broad aggregates are available in spreadsheet, tabular and chart form. Narrow aggregates can be found in spreadsheet form.

For Monetary and Financial Data Release Report:
http://www.centerforfinancialstability.org/amfm/Divisia_Sep16.pdf

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’

Coats on “What is wrong with our monetary policy?”

Former Chief of the SDR Division at the IMF Warren Coats unpacks a statement by Senator Jeff Merkley that

“The Fed should be using its economic expertise to highlight the long-term devastating impacts of failing to provide the opportunity for the skills needed for the economy of the future.” [1]

Warren’s paper examines monetary management in the United States – since the Nixon shock of closing the gold window and launching wage and price controls – to research the statement above. He finds:

  • No tradeoff exists between employment and inflation in the long run.
  • Radical innovations in New Zealand sparked rules that ultimately fell short of expectations.
  • NGDP targeting ignores the benefits of stable money.
  • The return to a hard anchor for monetary policy – such as the SDR – is attractive.

Although CFS is not promoting the idea of a newfound use for the SDR, monetary policy is in need of a rethink. Warren’s ideas are thoughtful and informative.

To view the full paper:
http://centerforfinancialstability.org/research/Coats_CFS_100516.pdf

As always, CFS welcomes opinion.

[1] Ylan Q. Mui, https://www.washingtonpost.com/news/wonk/wp/2016/08/26/liberals-fought-for-janet-yellen-to-lead-the-fed-now-they-hope-shes-more-more-ally-than-adversary/ The Washington Post Aug. 27, 2016