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| | The Fed and Money Supply |
 | | Money velocity, the ratio of nominal GDP to the M2 measure of money, tracks the turnover of money in the economy and, by implication, money’s impact on gross domestic product (GDP). |
 | | Although this general slowdown in money growth occurred prior to the Fed’s latest rate increase, the pattern is entirely consistent with the Fed’s desire to move its monetary stance from stimulus toward neutrality. |
 | | The money multiplier, for instance, is roughly in line with where it has hovered since the mid 1990s, suggesting that the broader aggregates, in this case M2, are roughly in line with the behavior of the monetary base. |
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