Money Supply Grows at a 6% Annualized Pace in September

Money Supply is a very important indicator. It helps show how tight or loose current monetary conditions are regardless of what the Fed is doing with interest rates. Even if the Fed is tight, if Money Supply is increasing, it has an inflationary effect.

One key metric shown below is the “Wenzel” 13-week annualized money supply figure. It was made popular by the late Robert Wenzel who tracked the metric weekly as an indicator for where the economy might be headed. In 2020, the Fed started reporting the data monthly instead of weekly. It should also be noted that Money Supply data can be heavily revised in future months.

Recent Trends

Seasonally Adjusted Money Supply has been growing on a consistent monthly basis since November 2023. The latest month (September) showed growth of $113B which is another large month under new Fed chair Warsh. Since Warsh took the mantle as Fed chair, nearly every monthly number has been larger than $100B. He can say that inflation is his greatest concern, but his actions say otherwise.