M2 Money Supply Beginning to Increase

For monetarists, increases in the money supply are generally believed to result in higher prices (inflation). Looking at the rate of increase from the late 1990s until today, there does not appear to be a major change.  The fear is that there is so much available in excess reserves in the banking system that once banks begin lending, M2 could dramatically increase.

For those concerned, after running level and even turning down for the first part of last year, it looks like M2 is beginning to accelerate. Draw your own conclusions as to whether this chart is meaningful or not.


This chart of M2 money supply is from the Fed of St. Louis.

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