The curious behavior of M2
May 8, 2012 Leave a comment
Found something interesting in the course of doing my day job. Check out M2 (since 1995) against its trend:
This raises a few interesting questions. The obvious one: why did this happen? I can say with extreme confidence that the level of M2 was never a serious topic of conversation at FOMC meetings from 1995-2006 (anything after that will remain a mystery until the transcripts are released), so you need a better explanation than that. Slightly less obvious: does this matter? All thoughts are welcome.