“Don’t just do something, stand there!”

Recent UK monetary trends are consistent with a medium-term return of inflation to target, implying that the Bank of England should hold policy even though current inflationary pressures will be slow to fade and the consensus will claim that it is “behind the curve”. The alternative would be to exacerbate a severe squeeze on real […] Continue reading

More recessionary monetary news

Incoming monetary data continue to give an ominous message for near-term global economic prospects while suggesting major inflation relief in 2023-24. Fed numbers released on Tuesday confirm that the US broad money aggregate tracked here* fell month-on-month in April, resulting in the three-month change turning marginally negative. Weekly data on currency in circulation, commercial bank […] Continue reading

Why has US money growth slowed?

US broad money growth has slowed significantly despite a strong pick-up in bank lending expansion. How has this occurred and does lending strength portend a rebound in money growth? The broad money aggregate calculated here* rose by 2.6% (5.2% annualised) in the six months to April, down from 4.5% (9.2%) in the prior six months […] Continue reading

Recession-consistent real money weakness

Global* six-month real narrow money momentum turned negative in March and is estimated to have fallen slightly further in April, based on monetary and CPI data covering two-thirds and 90% of the aggregate respectively – see chart 1. Chart 1 Current weakness is more pronounced than before the 2001 recession and almost on a par […] Continue reading

UK recession now odds-on

Six-month growth rates of UK narrow and broad money – as measured by non-financial M1 / M4 – fell in March. With six-month consumer price momentum rising further, real rates of change moved deeper into negative territory – see chart 1. Chart 1 The six-month contraction in real narrow money in March was slightly larger […] Continue reading

Monetary relief for bonds?

Global six-month real narrow money growth fell to zero in March*, the weakest since the GFC and a level historically consistent with recession – see chart 1. (The current reading matches a low before the 2001 recession.) Chart 1 A rebound in six-month industrial output growth, meanwhile, extended in March, reflecting a production catch-up from […] Continue reading