alt Hacker NewsIts the 'kept printing' that is the problem with the story.
There was a surge and a pull back.
Post-COVID Tightening: After this historic surge, the Federal Reserve began "quantitative tightening" in 2022 to combat inflation, slowing M2 growth to near zero and eventually reversing it.
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weberer • yesterday at 6:10 PM
>slowing M2 growth to near zero and eventually reversing it.
The M2 money supply went from 15.4b at the start of 2020 to a peak of 21.7b, before slightly reversing to 20.7b. Then they just continued printing. Now it currently stands at a record high of 22.2b. The dollar is more diluted than ever.
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This was arguably largely offset by the actions of the treasury's increased short duration issuance (>1 Trillion in t-bills) combined with draw-downs of the reverse repo facility[1] instead of from banks. It's difficult to tell exactly how much money winds it's way into the economy without using proxies - for example credit spreads[2] or NFCI[3] which indicate loose conditions, which don't show much evidence of post 2022 QT's impact.
Or in other words the data seems to show the loosening effects were more powerful than the tightening ones. Now that the RRP has been drawn down balance sheet growth will likely occur.
[1] https://fred.stlouisfed.org/series/RRPONTSYD
[2] https://fred.stlouisfed.org/series/BAMLH0A0HYM2
[3]https://www.chicagofed.org/research/data/nfci/current-data