If your measure of inflation is money supply, then the economy is in a deflationary period right now.

M1 and M2 numbers are from the Fed, ODL is a derivative of M2, described below. 

Data for the above chart is from the Fed's H.6 Money Stock Report, released January 24.

Monetary Definitions

• M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of other checkable deposits (or OCDs, which comprise negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions) and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and other liquid deposits, each seasonally adjusted separately.
• M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs. Seasonally adjusted M2 is constructed by summing small-denomination time deposits and retail MMFs, each seasonally adjusted separately, and adding the result to seasonally adjusted M1.
• ODL is described below

A Better Definition of Money and Lacy Hunt's Thoughts on When a Recession Will Start

I discussed ODL in A Better Definition of Money and Lacy Hunt's Thoughts on When a Recession Will Start

The main difference between ODL and M2 is that ODL does not include currency or retail money market funds. 

Currency is accepted at an increasingly fewer number of business establishments and simply cannot be used for very large sized transactions. Retail money market funds never became an important medium of exchange. Both are becoming a far less used medium of exchange.

ODL has the additional advantage that it is the main source of funding for bank loans and investments, making ODL both a monetary and credit aggregate. Friedman would not be surprised that the need to change the best definition of what constitutes money would change over the years. 

The above blocks courtesy of Lacy Hunt at Hoisington Management.

M1, M2, Other Deposit Liabilities Detail Since 2019 

M1, M2, Other Deposit Liabilities Percent Change From Year Ago

The Fed's QE panic attack during and after the Covid pandemic seriously distorted percentage changes in M1 money supply.

M2, Other Deposit Liabilities Percent Change From Year Ago 

Stripping out M1 (distorted by Sweeps) since the mid-1990s provides a better look at things. 

M2, Other Deposit Liabilities Percent Change From Year Ago Detail 

Not Since 1932

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— Jim Bianco biancoresearch.eth (@biancoresearch) January 24, 2023

Lacy Hunt On What It Means

From the last quarter of 2021 to the same quarter in 2022, nominal ODL is estimated to have declined at record 2.8% annual rate, the largest yearly drop in history. In real terms, ODL also contracted at a record pace.

Based upon the Fed’s monthly $96 billion balance sheet reduction and the monetary policy lags, the rate of ODL decline will accelerate in at least the first half of 2023.

If the Fed sticks with its plan to raise the Federal Funds rate another 75 basis points, the rate of decrease in ODL will be sufficient to neutralize the money mountain of 2020/21 by the second quarter of 2023, when taking velocity into consideration.

The above is from Lacy Hunt prior to the H.6 release on Tuesday.

Both Lacy and I think a recession started in November or December.

For more details, please see A Better Definition of Money and Lacy Hunt's Thoughts on When a Recession Will Start.

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