 Ask
Dr. Econ
July 2002
I heard an investment analyst say that the Fed had increased the money
supply, and that would lead to economic growth. What indicators would
tell me about the money supply and Fed monetary policy?
The Federal Reserve Board publishes information on a variety of interest
rates and monetary aggregates that you might find useful. This information
also is available on the Board's website and from some Federal Reserve
Bank websites. Let me recommend some sources to you, starting with a Federal
Reserve Bank of San Francisco publication, U.S.
Monetary Policy: An Introduction.
Monetary Policy Statement
Next, to keep up to date on Fed policy actions, you may wish to review
the statement released after the Federal Open Market Committee (FOMC),
the Fed's monetary policy-making group, meets to set monetary policy.
The statement typically presents a short summary of the FOMC's view on
the current state of the economy, monetary policy, and risks to the economy.
(http://www.federalreserve.gov/fomc/)
Twice a year the Fed Chairman also presents a longer report on monetary
policy to Congress. (http://www.federalreserve.gov/boarddocs/hh/)
Interest Rate Statistics
The Board publishes statistics on many economic indicators. You may
find the series, Selected Interest Rates, from the H.15 Statistical Release,
useful in tracking movements in the federal funds rate, the Fed's target
interest rate for monetary policy. The release also includes data on a
number of other interest rates and allows you to download historical data
for your own analysis.
(http://www.federalreserve.gov/releases/h15/)
Money Supply Statistics
The H.6 Statistical Release, Money Stock Measures, provides information
and downloadable data on the various money supply measures that the Fed
monitors for monetary policy purposes. The release provides data on the
components of the monetary aggregates, as well as the aggregates-such
as M1, M2, and M3. The release also provides statistics on the growth
rates of the various money supply measures. Finally, it is important to
note that policymakers actually target the federal funds rate; they only
monitor the monetary aggregates.
(http://www.federalreserve.gov/releases/h6/
NOTE: In March 2006 the Federal Reserve stopped publishing the M3 monetary aggregate, because the cost of collecting the information outweighed the value of the information collected. Please see the Press Release: Discontinuance of M3. H.6 Money Stock Measures, Press Release, revised March 9, 2006.
Online Publications
Finally, there are a number of interesting Federal Reserve Bank publications
that include data and charts showing interest rate and money supply trends.
One of my favorites is the Monetary Trends publication prepared
by the Federal Reserve Bank of St. Louis and available on their website
at (http://research.stlouisfed.org/publications/mt/mt.pdf)
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