Money Supply Growth Rate Plummets, Treasury Deposits Down 77% YTD

The sharp decline in lending growth is now pulling down the true money supply data (black line) as the y/y growth rate yesterday dropped to the lowest level since October 2015.

   

The U.S. Treasury's deposits with Federal Reserve banks, which has been the fastest growing money supply component during most of 2016, has now dropped to just $88 billion from the record October balance of $429 billion. It is now down 77% compared to the year end 2016 balance. This highlights the importance of including this account balance in an accurate measure of the money supply as the money was spent rather quickly by the Treasury.

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