Money Supply Growth Dropped In May To A 15-Month Low

Another factor in money supply growth has been growth in the Fed's balance sheet. After initial balance sheet growth in late 2019, total Fed assets surged to nearly $7.2 trillion in June and have rarely dipped below the $7 trillion mark since then. Assets have now reached a new all-time high above $8 trillion. These new asset purchases, fueled by newly-created money, are propelling the Fed balance sheet far beyond anything seen during the Great Recession's stimulus packages. The Fed's assets are now up more than 600 percent from the period immediately preceding the 2008 financial crisis. 

Total Fed assets, going back to 2007: 

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Some other factors are working to depress money creation, however. For example, commercial and industrial loans have been slowing, year over year, since February, with loan growth dropping from 10.1 percent in February to negative 16.1 percent in May. This is the largest decline since 2009. When loan activity drops, this will put downward pressure on money-supply growth.

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