Broad Money Supply Growth in the US Remains Robust and Inflationary

Considering the slowing GDP, the growth of the broad money supply figures, MZM and M2, remains exceptionally strong. We would expect the growth of the broad money supply to be a little closer to a steady growth in GDP. From the charts it appears obvious that the Fed stimulates money supply when the economy slows.

The money supply growth has been achieved in spite of the declining growth of commercial bank credit thanks in large part to the Fed, the Treasury and several of the foreign Central Banks. Money supply expands from many sources other than commercial bank lending.