M2 Charts Look Good

2025-05-14 20:15:00 ET

Summary

• Inflation happens when the supply of money exceeds the demand for it. M2 is arguably the best measure of money supply.
• Today, money supply and money demand appear to be in balance, which explains why inflation has been relatively low and stable.
• For the past year or so, M2 growth has picked up, but inflation has slowed, which implies that money demand has begun to stabilize at a lower level.

This blog is one of the few places you will find information about the all-important M2 measure of the US money supply. I've been covering this since I first began this blog in the summer of 2008....

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