It’s nearly curtains for M3, the broadest measure of money supply currently published by the Federal Reserve. “Currently” being the operative word here, since the Fed will cease M3 updates in March.
Dying, but not yet dead. Indeed, in the limited time left for M3 the series is showing some spirit for one final run skyward. In the latest weekly money-supply data published yesterday, M3 advanced by 8.1% for the week of December 26, 2005 v. its year-earlier level. The somewhat narrower gauge of money supply known as M2 grew by roughly half as fast, rising 4.1% over the same span. In fact, that’s no surprise. The spread between the two rates of increase has been growing ever wider as 2005 unfolded (as the chart below reveals), suggesting that there may be more difference between M2 and M3 than the central bank likes to admit.
