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Economy in Brief

U.S. Monetary Policy Is Less Accommodative
by Tom Moeller  August 22, 2014

The Federal Reserve has been reducing the growth in monetary liquidity. Three separate indicators suggest that the effort has been pervasive.

1) Money growth has been stable during the last several years and is down from its peak early in 2012.

2) Slower growth in non-borrowed reserves needed by the banking system also is in evidence.

3) The yield curve between 10-year Treasury notes and the Fed funds rate has narrowed sharply.

Over the short-term, the current stance of monetary policy still suggests, to many analysts, that positive economic growth will be sustained. Moreover, if money growth is held in check over several years it may imply that the recent pickup in inflation will be limited.

Labor Market Dynamics and Monetary Policy is the title of today's speech by Fed Chair Janet L. Yellen and it can be found here.

3-Mth 6-Mth 12-Mth 24-Mth 36-Mth
Money Supply Growth (M2, AR) 5.1 5.6 6.4 6.4 6.5
Non-Borrowed Reserve Growth (AR) 5.4 7.0 27.0 34.2 20.0
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