Full text of Monetary Trends : December 2014

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MonetaryTrends
December 2014

This publication contains charts and tables
compiled by the Data Desk staff
of the Federal Reserve Bank of St. Louis.
The data are related to U.S. monetary and financial conditions,
with an emphasis on various measures of the monetary policy stance.

Contents
Page
3
4
6
7
8
9
10
11
12
14
15
16
18

Monetary and Financial Indicators at a Glance
Monetary Aggregates and Their Components
Reserves Markets and Short-Term Credit Flows
Senior Loan Officer Opinion Survey on Bank Lending Practices
Measures of Expected Inflation
Interest Rates
Policy-Based Inflation Indicators
Implied Forward Rates, Futures Contracts, and Inflation-Indexed Securities
Velocity, Gross Domestic Product, and M2
Bank Credit
Stock Market Index and Foreign Inflation and Interest Rates
Reference Tables
Definitions, Notes, and Sources

Conventions used in this publication:
1. Unless otherwise indicated, data are monthly.
2. Shaded areas indicate recessions, as determined by the National Bureau of Economic Research.
3. Percent change at an annual rate is the simple, not compounded, monthly percent change multiplied by 12. For
example, using consecutive months, the percent change at an annual rate in x between month t –1 and the current
month t is: [(xτ /x τ – 1 )–1] × 1200. Note that this differs from National Economic Trends. In that publication, monthly
percent changes are compounded and expressed as annual growth rates.
4. The percent change from year ago refers to the percent change from the same period in the previous year. For example,
the percent change from year ago in x between month t –12 and the current month t is: [(xτ /x τ – 12 )–1] × 100.
We welcome your comments addressed to:
Editor, Monetary Trends
Research Division
Federal Reserve Bank of St. Louis
P.O. Box 442
St. Louis, MO 63166-0442

On March 23, 2006, the Board of Governors of the
Federal Reserve System ceased the publication of the
M3 monetary aggregate. It also ceased publishing
the following components: large-denomination time
deposits, RPs, and eurodollars.

or to:
stlsFRED@stls.frb.org

Monetary Trends is published monthly by the Research Division of the Federal Reserve Bank of St. Louis. Visit the Research Division’s website at research.stlouisfed.org/publications/mt to
download the current version of this publication or register for e-mail notification updates. For more information on data in the publication, please visit research.stlouisfed.org/fred2 or call
(314) 444-8590.

updated through
12/02/14

Monetary Trends

M2 and MZM

Treasury Yield Curve

Billions of dollars

Percent
3.7

13000
12500

3.2

12000
11500

MZM

Week Ending Friday:
11/29/13
10/31/14
11/28/14

2.7

11000
10500
2.2
10000

M2

9500

1.7

9000
8500

1.2

2011

2012

2013

5y

2014

Adjusted Monetary Base

7y

10y

20y

Real Treasury Yield Curve

Percent change at an annual rate

Percent

120

1.3

100

1.1
0.9

80

Week Ending Friday:
11/29/13
10/31/14
11/28/14

0.7
60
0.5
40
0.3
20
0.1
0

-0.1

-20

-0.3

-40

-0.5

2011

2012

2013

5y

2014

Reserve Market Rates

7y

10y

20y

Inflation-Indexed Treasury Yield Spreads
Percent

1.00

2.4

Effective Federal Funds Rate
Intended Federal Funds Rate*

2.2

0.75

Week Ending Friday:
11/29/13
10/31/14
11/28/14

Primary Credit Rate
2.0
0.50
1.8
0.25
1.6

0.00

1.4

2011

2012

2013

2014

5y

7y

10y

20y

*Note: Effective December 16, 2008, FOMC reports the Intended
Federal Funds Rate as a range. Currently, Intended Federal Funds
Rate is not plotted on this chart due to the note above.
Research Division
Federal Reserve Bank of St. Louis

3

updated through
12/02/14

Monetary Trends
M1
Percent change from year ago
24
18
12
6
0
-6

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

02

03

04

05

06

07

08

09

10

11

12

13

14

MZM
Percent change from year ago
25
20
15
10
5
0
-5

97

98

99

M2
Percent change from year ago
12
9
6
3
0
-3

97

98

99

Monetary Services Index - M2
Percent change from year ago
15
12
9
6
3
0
-3

97

98

99

00

01

Research Division

4

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends

Adjusted Monetary Base
Percent change from year ago
120
100
80
60
40
20
0
-20

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

14

13

Domestic Nonfinancial Debt

Currency Held by the Nonbank Public

Percent change from year ago

Percent change from year ago

40

10

30

9
8

20

Total
10

7

0

6

Federal

-10

5

2007

2008

2009

2010

2011

2012

2013

2014

2011

2012

Small Denomination Time Deposits

Checkable Deposits

Percent change from year ago

Percent change from year ago

0

35

-6

28

-12

21

-18

14

-24

2013

2014

2013

2014

2013

2014

7

2011

2012

2013

2014

2011

2012

Money Market Mutual Fund Shares

Savings Deposits

Percent change from year ago

Percent change from year ago
16

5
0

14

Retail Funds

-5

12

-10

10

Institutional Funds
-15

8

-20

6

2011

2012

2013

2014

2011

2012

Research Division
Federal Reserve Bank of St. Louis

5

updated through
12/02/14

Monetary Trends
Adjusted and Required Reserves
Billions of dollars
3000
2500
2000
1500
1000
500

Adjusted

Required

0

97

98

99

00

01

02

03

04

05

Total Borrowings

06

07

08

09

10

11

12

13

14

Excess Reserve Balances

Billions of dollars

Billions of dollars
2800

800

2400
600

2000
1600

400
1200
800

200

400
0

0

2007

2008

2009

2010

2011

2012

2013

2014

03

04

2007

2008

2009

2010

2011

2012

2013

2014

07

08

09

10

11

12

13

14

10

11

12

13

14

Nonfinancial Commercial Paper
Percent change from year ago
60

30

0

-30

-60

97

98

99

00

01

02

05

06

As of April 10, 2006, the Federal Reserve Board made major changes to its commercial paper calculations.
For more information, please refer to http://www.federalreserve.gov/releases/cp/about.htm.

Consumer Credit
Percent change from year ago
20

10

0

-10

97

98

99

00

01

02

03

04

05

06

07

08

09

Research Division

6

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends

Net Percentage of Domestic Banks Tightening Standards for Commercial and Industrial Loans
Percentage

90

Large & Medium Firms

60

30

Small Firms
0

-30

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

Net Percentage of Domestic Banks Tightening Standards for Commercial Real Estate Loans
Percentage

90

60

30

0

-30

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

Net Percentage of Domestic Banks Tightening Standards for Residential Mortgage Loans
Percentage

80
60
40
20
0
-20

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

11

12

13

14

Net Percentage of Domestic Banks Tightening Standards for Consumer Loans
Percentage

90

60

Credit Card Loans
30

0

Other Consumer Loans
-30

97

98

99

00

01

02

03

04

05

06

07

08

09

10

Research Division
Federal Reserve Bank of St. Louis

7

updated through
12/02/14

Monetary Trends

CPI Inflation and 1-Year-Ahead CPI Inflation Expectations
Percent
6

CPI Inflation

5

Humphrey-Hawkins CPI Inflation Range
4
3
|
|
|
|
|
|
|
|
|
|
|
|
|

2
1

University of
Michigan

0
-1

Federal Reserve Bank
of Philadelphia

-2

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

14

13

15

The shaded region shows the Humphrey-Hawkins CPI inflation range. Beginning in January 2000,the Humphrey-Hawkins inflation range was reported
using the PCE price index and therefore is not shown on this graph.

10-Year Ahead PCE Inflation Expectations and Realized Inflation
Percent
8

6

4

2

Expected

Realized
0
65

70

75

80

85

90

95

00

05

10

See the notes section for an explanation of the chart.

Treasury Security Yield Spreads

Real Interest Rates

Yield to maturity

Percent, Real rate = Nominal rate less year-over-year CPI inflation

4

4

10-Year less 3-Month T-Bill

1-Year Treasury Yield
2
2

0

0

|
|
|

-2

05

06

-2

3-Year less 3-Month T-Bill

10-Year less
3-Year Note

||
|
|

Federal Funds Rate

07

08

09

10

11

12

13

14

-4

05

06

07

08

09

10

11

12

13

14

Research Division

8

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends

Short-Term Interest Rates
Percent
12
10
8
6

90-Day Commercial Paper

Prime Rate

4
2

3-Month Treasury Yield

0
-2
97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

11

12

13

14

Long-Term Interest Rates
Percent
10

Conventional Mortgage
7

|
|
|
|
|

4

Corporate Aaa
10-Year Treasury Yield
1
97

98

99

00

01

02

03

04

05

06

07

08

09

10

Long-Term Interest Rates

Short-Term Interest Rates

Percent

Percent

8

0.25

Corporate Baa
0.20

6

90-Day Commercial Paper
0.15

4
0.10

2

0.05

10-Year Treasury Yield
0

3-Month
Treasury Yield

0.00

2011

2012

2013

2014

2011

2012

2013

2014

FOMC Intended Federal Funds Rate, Discount Rate, and Primary Credit Rate
Percent
8

Intended Federal
Funds Rate

6
4

Discount Rate

Primary Credit
Rate

2
0
97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

Research Division
Federal Reserve Bank of St. Louis

9

updated through
12/02/14

Monetary Trends
Federal Funds Rate and Inflation Targets
Percent
10

4% 3% 2% 1% 0% Target Inflation Rates
5

Actual
0

-5

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Calculated federal funds rate is based on Taylor's rule.

Components of Taylor's Rule
Actual and Potential Real GDP
PCE Inflation
Billions of chain-weighted 2009 dollars

Percent change from year ago
5

17000

Potential

4

16000
3
15000

2

Actual

1

14000
0
13000

-1

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

See notes section for further explanation.

Monetary Base Growth and Inflation Targets
Percent
30

Actual

Target Inflation Rates 0% 1% 2% 3% 4%
15

0

-15

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Calculated base growth is based on McCallum's rule. Actual base growth is percent change from the previous quarter. Stars represent actual values for 2008:Q4, 2009:Q1,
2009:Q4, 2011:Q1, 2011:Q2, 2013:Q1, 2013:Q2 and 2013:Q3 are 188.33%, 60.16%, 56.53%, 45.93%, 58.75%, 30.24%, 36.03% and 33.88%, respectively.

Components of McCallum's Rule
Monetary Base Velocity Growth
Real Output Growth
Percent

Percent

20

10

Recursive Average

10-Year
Moving Average

||

0

||
||
|

5

-20
0
-40

Change from
a Year Ago

-60

Quarter to Quarter
Growth Rate

-5

-80

-10

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Research Division

10

Federal Reserve Bank of St. Louis

updated through
12/03/14

Monetary Trends
Implied One-Year Forward Rates

Rates on 3-Month Eurodollar Futures

Percent
6

Percent, daily data
0.29

Week Ending:
11/29/13
10/31/14
11/28/14

5
4

0.28

3

0.26

2

0.25

1

0.24

0

2y

Feb 2015

0.27

5y

3y

7y

10y

Jan 2015
Dec 2014

0.23
10/03

Rates on Selected
Federal Funds Futures Contracts
Percent, daily data

10/24

10/31

11/07

11/14

11/21

11/28

12/05

Percent
0.51
0.46
0.41
0.36
0.31
0.26
0.21
0.16
0.11
0.06

0.4

12-Month Futures
0.3
0.2

6-Month Futures

0.1

3-Month Futures

1st Expiring Contract

0.0
10/10

10/17

Rates on Federal Funds Futures
on Selected Dates

0.5

10/03

10/10

10/17

10/24

10/31

11/07

11/14

11/21

11/28

12/05

Week Ending:
10/08/14
11/04/14
12/02/14

1st-Expiring Contract

3-Month

12-Month

6-Month

Contract Settlement Month

Inflation-Indexed Treasury Securities

Inflation-Indexed Treasury Yield Spreads

Weekly data

Weekly data

Percent

Percent

4.00

4.00

1.67

1.67

-0.67

-0.67

20

-3.00
2012

15
10

2013
.

2014

2015

5

Maturity

20

-3.00
2012

15
10

2013
.

Note: Yields are inflation-indexed constant maturity
U.S. Treasury securities

2014

2015

5

Horizon

Note: Yield spread is between nominal and inflation-indexed
constant maturity U.S. Treasury securities.

Inflation-Indexed
10-Year Government Notes

Inflation-Indexed
10-Year Government Yield Spreads

Percent, weekly data

Percent, weekly data
3

3

2
2

U.S.

U.S.

1
1
0

0

-1

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

Note: Data is temporarily unavailable for the French and U.K. 10-Year Notes and Government Yield Spreads.

Research Division

11

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends
Velocity
Nominal GDP/MZM, Nominal GDP/M2 (Ratio Scale)
2.75
2.50

MZM

2.25
2.00

M2

1.75

1.50

1.25
13515

97

13880

98

14245

99

14610

00

14976

01

15341

02

15706

03

16071

04

16437

05

16802

06

17167

07

17532

08

17898

09

18263

10

18628

11

18993

12

19359

13

19724

14

20089

Interest Rates
Percent
8

6

3-Month T-Bill
4

M2 Own
2

MZM Own

0

97

98

99

00

01

02

03

04

05

06

08

09

10

11

12

13

MZM Velocity and Interest Rate Spread

M2 Velocity and Interest Rate Spread

Ratio Scale

Ratio Scale

3.50

14

2.25

Velocity = Nominal GDP / M2

Velocity = Nominal GDP / MZM

07

3.00
2.50

2.00

1.50

2.00

1.75

1.50

1974Q1 to 1993Q4
1994Q1 to present

1974Q1 to 1993Q4
1994Q1 to present
1.25

1.00

-1

0
3
5
6
8
9
10 11
1
2
4
7
Interest Rate Spread = 3-Month T-Bill less MZM Own Rate

-1

0
3
5
6
1
2
4
Interest Rate Spread = 3-Month T-Bill less M2 Own Rate

Research Division

12

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends

Gross Domestic Product
Percent change from year ago
10
8
6
4
2
0
-2
-4

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

02

03

04

05

06

07

08

09

10

11

12

13

14

Dashed lines indicate 10-year moving averages.

Real Gross Domestic Product
Percent change from year ago
6

3

0

-3

-6

97

98

99

00

01

Dashed lines indicate 10-year moving averages.

Gross Domestic Product Price Index
Percent change from year ago
5
4
3
2
1
0

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

02

03

04

05

06

07

08

09

10

11

12

13

14

Dashed lines indicate 10-year moving averages.

M2
Percent change from year ago
12

9

6

3

0

97

98

99

00

01

Dashed lines indicate 10-year moving averages.

Research Division
Federal Reserve Bank of St. Louis

13

updated through
12/02/14

Monetary Trends
Bank Credit
Percent change from year ago
15
10
5
0
-5
-10

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2011

2012

2013

2014

2012

2013

2014

Investment Securities in Bank Credit at Commercial Banks
Percent change from year ago
20
15
10
5
0
-5

2005

2006

2007

2008

2009

2010

Total Loans and Leases in Bank Credit at Commercial Banks
Percent change from year ago
15
10
5
0
-5
-10
-15

2005

2006

2007

2008

2009

2010

2011

Commercial and Industrial Loans at Commercial Banks
Percent change from year ago
30

15

0

-15

-30

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Research Division

14

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends

Standard & Poor's 500
2500

150

2000

120

Composite Index
(left)
1500

90

1000

60

Price/Earnings Ratio
(right)
500

30

0

0

97

98

99

00

01

02

*The S&P Dow Jones Indices LLC series are Copyright

03

04

05

06

07

08

09

10

11

13

12

14

2014, S&P Dow Jones Indices LLC. All rights reserved.

Recent Inflation and Long-Term Interest Rates
Consumer Price
Inflation Rates
Percent change from year ago
2013Q3
2013Q4
2014Q1

Long-Term
Government Bond Rates
2014Q2

Aug14

Percent
Sep14
Oct14

United States

1.22

1.40

2.06

2.42

2.53

Canada

1.15

0.93

1.39

2.22

2.06

2.18

.

.

France

0.95

0.65

0.72

0.63

1.41

1.35

1.26

.

Germany

1.63

1.34

1.21

1.08

0.95

0.92

0.79

.

Italy

1.13

0.69

0.50

0.44

2.63

2.40

2.42

.

Japan

0.91

1.41

1.51

3.61

0.49

0.50

.

.

United Kingdom

2.69

2.09

1.76

1.72

2.52

2.48

2.27

.

* Copyright

2.30

Nov14

1.54

2.33

, 2011, Organisation for Economic Cooperation and Development, OECD Main Economic Indicators (www.oecd.org).

Inflation and Long-Term Interest Rate Differentials
Percent

Percent

1

4

Canada
0

2

U.K.
U.K.
-1

Canada

0

Germany

Germany

Japan

-2

-2

Inflation differential = Foreign inflation less U.S. inflation
Long-term rate differential = Foreign rate less U.S. rate
-3

Japan
-4

2011

2012

2013

2014

2011

2012

2013

2014

Research Division
Federal Reserve Bank of St. Louis

15

updated through
12/02/14

Monetary Trends
Money Stock
M1

MZM

M2

M3*

Bank

Adjusted

Credit

Monetary Base

Reserves

MSI M2**

2009.

1637.621

9546.199

8392.347

.

9170.902

1796.556

944.368

8789.633

2010.

1741.916

9539.869

8601.172

.

9123.249

2031.689

1143.690

9033.800

2011.

2009.578

10206.58

9229.341

.

9220.464

2538.959

1576.503

9725.950

2012.

2311.410

11062.71

10019.23

.

9713.477

2661.969

1611.904

10581.97

2013.

2544.714

11872.98

10691.82

.

10021.76

3271.717

2144.969

11309.34

2012

1

2213.283

10766.48

9764.609

.

9535.644

2688.263

1662.512

10299.80

.

2

2258.090

10929.48

9905.657

.

9656.592

2651.102

1615.814

10434.77

.

3

2350.855

11156.38

10097.47

.

9771.957

2651.597

1601.127

10670.30

.

4

2423.410

11398.50

10309.20

.

9889.717

2656.914

1568.164

10923.00

2013

1

2471.467

11622.42

10481.89

.

9988.927

2865.577

1760.057

11067.70

.

2

2524.174

11760.86

10603.30

.

10040.95

3135.692

2025.831

11183.03

.

3

2562.851

11952.27

10750.34

.

10003.20

3412.927

2287.471

11391.10

.

4

2620.365

12156.37

10931.74

.

10053.98

3672.670

2506.515

11595.53

2014

1

2717.261

12338.72

11114.98

.

10202.79

3842.868

2658.868

.

.

2

2800.058

12493.77

11289.55

.

10413.10

3956.037

2761.831

.

.

3

2838.249

12655.85

11442.36

.

10599.57

4059.283

2850.938

.

2012 Oct

2415.425

11301.83

10223.01

.

9830.395

2648.761

1584.758

10843.10

.

Nov

2407.669

11371.89

10288.79

.

9882.999

2665.101

1581.304

10904.00

.

Dec

2447.135

11521.79

10415.81

.

9955.757

2656.879

1538.430

11021.90

2013 Jan

2464.560

11589.07

10451.99

.

9983.401

2748.980

1594.015

11066.80

.

Feb

2473.572

11609.33

10464.20

.

9990.633

2874.405

1794.639

11045.60

.

Mar

2476.268

11668.87

10529.49

.

9992.747

2973.347

1891.517

11090.70

.

Apr

2517.689

11711.73

10563.28

.

10048.53

3045.674

1954.979

11154.40

.

May

2525.705

11753.08

10599.63

.

10039.46

3139.116

2013.763

11176.80

.

Jun

2529.128

11817.76

10647.00

.

10034.87

3222.287

2108.752

11217.90

.

Jul

2555.963

11892.68

10704.68

.

10018.18

3310.260

2184.808

11330.70

.

Aug

2554.113

11944.64

10750.36

.

9994.799

3419.555

2303.434

11393.80

.

Sep

2578.476

12019.48

10795.97

.

9996.620

3508.965

2374.171

11448.80

.

Oct

2617.137

12126.47

10903.26

.

10026.92

3630.629

2500.930

11591.10

.

Nov

2601.866

12147.05

10916.74

.

10047.91

3702.083

2545.488

11569.10

.

Dec

2642.093

12195.60

10975.23

.

10087.11

3685.298

2473.126

11626.40

2014 Jan

2678.493

12256.92

11034.54

.

10121.91

3733.498

2471.897

.

.

Feb

2724.204

12359.93

11137.77

.

10198.73

3869.437

2731.159

.

.

Mar

2749.086

12399.32

11172.63

.

10287.72

3925.669

2773.547

.

.

Apr

2781.140

12428.33

11228.00

.

10344.65

3965.001

2796.017

.

.

May

2789.886

12505.45

11298.06

.

10412.29

3932.332

2716.678

.

.

Jun

2829.147

12547.53

11342.58

.

10482.37

3970.779

2772.798

.

.

Jul

2853.708

12627.87

11414.42

.

10557.18

4008.880

2797.085

.

.

Aug

2806.038

12648.50

11439.21

.

10599.65

4096.954

2899.585

.

.

Sep

2855.001

12691.20

11473.44

.

10641.89

4072.016

2856.145

.

.

Oct

2854.317

12759.00

11511.34

.

10682.99

4041.262

2834.053

.

Note: All values are given in billions of dollars. *See table of contents for changes to the series.

Research Division

16

Federal Reserve Bank of St. Louis

updated through
12/02/14

Monetary Trends

Federal

Primary Prime

3-mo

Funds Credit Rate Rate

CDs

Treasury Yields
3-mo

3-yr

10-yr

Corporate

Municipal

Aaa Bonds Aaa Bonds

Conventional
Mortgage

2009.
2010.
2011.
2012.
2013.

0.16
0.17
0.10
0.14
0.11

0.50
0.72
0.75
0.75
0.75

3.25
3.25
3.25
3.25
3.25

.
.
.
.
.

0.15
0.14
0.05
0.09
0.06

1.43
1.11
0.75
0.38
0.54

3.26
3.21
2.79
1.80
2.35

5.31
4.94
4.64
3.67
4.24

4.27
3.90
4.26
3.12
3.49

5.04
4.69
4.46
3.66
3.98

2012
.
.
.

1
2
3
4

0.10
0.15
0.14
0.16

0.75
0.75
0.75
0.75

3.25
3.25
3.25
3.25

.
.
.
.

0.07
0.09
0.10
0.09

0.42
0.40
0.35
0.36

2.04
1.82
1.64
1.71

3.89
3.80
3.45
3.54

3.31
3.32
3.05
2.81

3.92
3.79
3.55
3.36

2013
.
.
.

1
2
3
4

0.14
0.12
0.08
0.09

0.75
0.75
0.75
0.75

3.25
3.25
3.25
3.25

.
.
.
.

0.09
0.05
0.03
0.06

0.39
0.44
0.71
0.63

1.95
2.00
2.71
2.75

3.88
3.97
4.51
4.59

3.01
3.31
3.86
3.77

3.50
3.68
4.44
4.30

2014
.
.

1
2
3

0.07
0.09
0.09

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.05
0.03
0.03

0.76
0.87
0.98

2.76
2.62
2.50

4.44
4.22
4.12

3.81
3.47
3.28

4.36
4.23
4.14

2012 Nov
. Dec

0.16
0.16

0.75
0.75

3.25
3.25

.
.

0.09
0.07

0.36
0.35

1.65
1.72

3.50
3.65

2.76
2.81

3.35
3.35

2013 Jan
. Feb
. Mar

0.14
0.15
0.14

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.07
0.10
0.09

0.39
0.40
0.39

1.91
1.98
1.96

3.80
3.90
3.93

2.83
3.08
3.13

3.41
3.53
3.57

.
.
.

Apr
May
Jun

0.15
0.11
0.09

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.06
0.04
0.05

0.34
0.40
0.58

1.76
1.93
2.30

3.73
3.89
4.27

3.11
3.13
3.70

3.45
3.54
4.07

.
.
.

Jul
Aug
Sep

0.09
0.08
0.08

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.04
0.04
0.02

0.64
0.70
0.78

2.58
2.74
2.81

4.34
4.54
4.64

3.73
3.91
3.94

4.37
4.46
4.49

.
.
.

Oct
Nov
Dec

0.09
0.08
0.09

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.05
0.07
0.07

0.63
0.58
0.69

2.62
2.72
2.90

4.53
4.63
4.62

3.60
3.56
4.15

4.19
4.26
4.46

2014 Jan
. Feb
. Mar

0.07
0.07
0.08

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.04
0.05
0.05

0.78
0.69
0.82

2.86
2.71
2.72

4.49
4.45
4.38

3.94
3.77
3.72

4.43
4.30
4.34

.
.
.

Apr
May
Jun

0.09
0.09
0.10

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.03
0.03
0.04

0.88
0.83
0.90

2.71
2.56
2.60

4.24
4.16
4.25

3.57
3.43
3.41

4.34
4.19
4.16

.
.
.

Jul
Aug
Sep

0.09
0.09
0.09

0.75
0.75
0.75

3.25
3.25
3.25

.
.
.

0.03
0.03
0.02

0.97
0.93
1.05

2.54
2.42
2.53

4.16
4.08
4.11

3.38
3.25
3.21

4.13
4.12
4.16

.
.

Oct
Nov

0.09
0.09

0.75
0.75

3.25
3.25

.
.

0.02
0.02

0.88
0.96

2.30
2.33

3.92
3.92

3.04
.

4.04
4.00

Note: All values are given as a percent at an annual rate.

Research Division
Federal Reserve Bank of St. Louis

17

updated through
12/02/14

Monetary Trends

M1

MZM

M2

M3*

Percent change at an annual rate

2009.
2010.
2011.
2012.
2013.

14.17
6.37
15.37
15.02
10.09

9.62
-0.07
6.99
8.39
7.32

8.06
2.49
7.30
8.56
6.71

.
.
.
.
.

2012
.
.
.

1
2
3
4

11.16
8.10
16.43
12.35

7.57
6.06
8.30
8.68

7.49
5.78
7.75
8.39

.
.
.
.

2013
.
.
.

1
2
3
4

7.93
8.53
6.13
8.98

7.86
4.76
6.51
6.83

6.70
4.63
5.55
6.75

.
.
.
.

2014
.
.

1
2
3

14.79
12.19
5.46

6.00
5.03
5.19

6.70
6.28
5.41

.
.
.

2012 Oct
. Nov
. Dec

16.06
-3.85
19.67

6.50
7.44
15.82

6.66
7.72
14.81

.
.
.

2013 Jan
. Feb
. Mar

8.54
4.39
1.31

7.01
2.10
6.15

4.17
1.40
7.49

.
.
.

.
.
.

Apr
May
Jun

20.07
3.82
1.63

4.41
4.24
6.60

3.85
4.13
5.36

.
.
.

.
.
.

Jul
Aug
Sep

12.73
-0.87
11.45

7.61
5.24
7.52

6.50
5.12
5.09

.
.
.

.
.
.

Oct
Nov
Dec

17.99
-7.00
18.55

10.68
2.04
4.80

11.92
1.48
6.43

.
.
.

2014 Jan
. Feb
. Mar

16.53
20.48
10.96

6.03
10.08
3.82

6.48
11.23
3.76

.
.
.

.
.
.

Apr
May
Jun

13.99
3.77
16.89

2.81
7.45
4.04

5.95
7.49
4.73

.
.
.

.
.
.

Jul
Aug
Sep

10.42
-20.05
20.94

7.68
1.96
4.05

7.60
2.61
3.59

.
.
.

.

Oct

-0.29

6.41

3.96

.

*See table of contents for changes to the series.

Research Division

18

Federal Reserve Bank of St. Louis

Monetary Trends

Definitions
M1: The sum of currency held outside the vaults of depository institutions,
Federal Reserve Banks, and the U.S. Treasury; travelers checks; and demand
and other checkable deposits issued by financial institutions (except demand
deposits due to the Treasury and depository institutions), minus cash items in
process of collection and Federal Reserve float.
MZM (money, zero maturity): M2 minus small-denomination time deposits,
plus institutional money market mutual funds (that is, those included in M3 but
excluded from M2). The label MZM was coined by William Poole (1991); the
aggregate itself was proposed earlier by Motley (1988).
M2: M1 plus savings deposits (including money market deposit accounts)
and small-denomination (under $100,000) time deposits issued by financial
institutions; and shares in retail money market mutual funds (funds with initial
investments under $50,000), net of retirement accounts.
M3: M2 plus large-denomination ($100,000 or more) time deposits; repurchase
agreements issued by depository institutions; Eurodollar deposits, specifically,
dollar-denominated deposits due to nonbank U.S. addresses held at foreign
offices of U.S. banks worldwide and all banking offices in Canada and the
United Kingdom; and institutional money market mutual funds (funds with
initial investments of $50,000 or more).
Bank Credit: All loans, leases, and securities held by commercial banks.
Domestic Nonfinancial Debt: Total credit market liabilities of the U.S.
Treasury, federally sponsored agencies, state and local governments, households,
and nonfinancial firms. End-of-period basis.
Adjusted Monetary Base: The sum of currency in circulation outside Federal
Reserve Banks and the U.S. Treasury, deposits of depository financial institutions at Federal Reserve Banks, and an adjustment for the effects of
changes in statutory reserve requirements on the quantity of base money held
by depositories. This series is a spliced chain index; see Anderson and Rasche
(1996a,b, 2001, 2003).
Adjusted Reserves: The sum of vault cash and Federal Reserve Bank deposits
held by depository institutions and an adjustment for the effects of changes in
statutory reserve requirements on the quantity of base money held by depositories. This spliced chain index is numerically larger than the Board of
Governors’ measure, which excludes vault cash not used to satisfy statutory
reserve requirements and Federal Reserve Bank deposits used to satisfy required
clearing balance contracts; see Anderson and Rasche (1996a, 2001, 2003).
Monetary Services Index: An index that measures the flow of monetary services received by households and firms from their holdings of liquid assets;
see Anderson, Jones, and Nesmith (1997). Indexes are shown for the assets
included in M2, with additional data at research.stlouisfed.org/msi/index.html.
Note: M1, M2, M3, Bank Credit, and Domestic Nonfinancial Debt are constructed and published by the Board of Governors of the Federal Reserve
System. For details, see Statistical Supplement to the Federal Reserve Bulletin,
tables 1.21 and 1.26. MZM, Adjusted Monetary Base, Adjusted Reserves,
and Monetary Services Index are constructed and published by the Research
Division of the Federal Reserve Bank of St. Louis.

Notes
Page 3: Readers are cautioned that, since early 1994, the level and growth of
M1 have been depressed by retail sweep programs that reclassify transactions
deposits (demand deposits and other checkable deposits) as savings deposits
overnight, thereby reducing banks’ required reserves; see Anderson and Rasche
(2001) and research.stlouisfed.org/aggreg/swdata.html. Primary Credit Rate,
Discount Rate, and Intended Federal Funds Rate shown in the chart Reserve
Market Rates are plotted as of the date of the change, while the Effective
Federal Funds Rate is plotted as of the end of the month. Interest rates in
the table are monthly averages from the Board of Governors H.15 Statistical

Research Division
Federal Reserve Bank of St. Louis

Release. The Treasury Yield Curve and Real Treasury Yield Curve show
constant maturity yields calculated by the U.S. Treasury for securities 5, 7, 10,
and 20 years to maturity. Inflation-Indexed Treasury Yield Spreads are a
measure of inflation compensation at those horizons, and it is simply the
nominal constant maturity yield less the real constant maturity yield. Daily data
and descriptions are available at research.stlouisfed.org/fred2/. See also Statistical
Supplement to the Federal Reserve Bulletin, table 1.35. The 30-year constant
maturity series was discontinued by the Treasury as of February 18, 2002.
Page 5: Checkable Deposits is the sum of demand and other checkable
deposits. Savings Deposits is the sum of money market deposit accounts
and passbook and statement savings. Time Deposits have a minimum initial
maturity of 7 days. Retail Money Market Mutual Funds are included in M2.
Institutional money market funds are not included in M2.
Page 6: Excess Reserve Balances equals the amount of reserve balances
maintained at depository institutions (DIs) less reserve balance requirements
at DIs. Total Borrowings from the Federal Reserve is the sum of credit
extended under the primary, second, and seasonal programs, as well as credit
extended under the Term Asset-Backed Securities Loan Facility, and other
credit extensions. [NOTE: Excess reserves and total borrowings are not seasonally adjusted.] The excess reserves calculation was changed with the
introduction of the new H.3 statistical release, “Aggregate Reserves of
Depository Institutions and the Monetary Base” on July 11, 2013. See
http://www.federalreserve.gov/releases/h3/current/.
Page 7: Data are reported in the Senior Loan Officer Opinion Survey on
Bank Lending Practices.
Page 8: Inflation Expectations measures include the quarterly Federal Reserve
Bank of Philadelphia Survey of Professional Forecasters, the monthly University
of Michigan Survey Research Center’s Surveys of Consumers, and the annual
Federal Open Market Committee (FOMC) range as reported to the Congress
in the February testimony that accompanies the Monetary Policy Report to
the Congress. Beginning February 2000, the FOMC began using the personal
consumption expenditures (PCE) price index to report its inflation range; the
FOMC then switched to the PCE chain-type price index excluding food and
energy prices (“core”) beginning July 2004. Accordingly, neither are shown
on this graph. CPI Inflation is the percentage change from a year ago in the
consumer price index for all urban consumers. Real Interest Rates are ex post
measures, equal to nominal rates minus year-over-year CPI inflation.
From 1991 to the present the source of the long-term PCE inflation expectations
data is the Federal Reserve Bank of Philadelphia’s Survey of Professional
Forecasters. Prior to 1991, the data were obtained from the Board of Governors
of the Federal Reserve System. Realized (actual) inflation is the annualized rate
of change for the 40-quarter period that corresponds to the forecast horizon (the
expectations measure). For example, in 1965:Q1, annualized PCE inflation
over the next 40 quarters was expected to average 1.7 percent. In actuality,
the average annualized rate of change measured 4.8 percent from 1965:Q1 to
1975:Q1. Thus, the vertical distance between the two lines in the chart at any
point is the forecast error.
Page 9: FOMC Intended Federal Funds Rate is the level (or midpoint of
the range, if applicable) of the federal funds rate that the staff of the FOMC
expected to be consistent with the desired degree of pressure on bank reserve
positions. In recent years, the FOMC has set an explicit target for the federal
funds rate.
Page 10: Federal Funds Rate and Inflation Targets shows the observed
federal funds rate, quarterly, and the level of the funds rate implied by applying Taylor’s (1993) equation
ft*= 2.5 + π t –1 + (π t –1 – π* )/2 + 100 × (yt –1 – yt –1P )/2
to five alternative target inflation rates, π* = 0, 1, 2, 3, 4 percent, where ft* is
the implied federal funds rate, π t –1 is the previous period’s inflation rate
(PCE) measured on a year-over-year basis, yt –1 is the log of the previous
period’s level of real gross domestic product (GDP), and yt –1P is the log of an
estimate of the previous period’s level of potential output. Potential Real
GDP is estimated by the Congressional Budget Office (CBO).

19

Monetary Trends
Monetary Base Growth and Inflation Targets shows the quarterly growth
of the adjusted monetary base implied by applying McCallum’s (2000, p. 52)
equation
Δbt = Δxt* − Δvta + λ ( Δxt* − Δxt −1 ),
Δxt* = π * + Δyt*
to five alternative target inflation rates, π* = 0, 1, 2, 3, 4 percent, where Δbt
is the implied growth rate of the adjusted monetary base, Δy*t is the 10-year
moving average growth in real GDP, Δνta is the average base velocity growth
(calculated recursively), Δxt–1 is the lag growth rate of nominal GDP, and
λ = 0.5.
Page 11: Implied One-Year Forward Rates are calculated by this Bank from
Treasury constant maturity yields. Yields to maturity, R(m), for securities with
m = 1,..., 10 years to maturity are obtained by linear interpolation between
reported yields. These yields are smoothed by fitting the regression suggested
by Nelson and Siegel (1987),
R(m) = a0 + (a1 + a2 )(1 – e–m/50 )/(m/50) – a2 × e–m/50,
and forward rates are calculated from these smoothed yields using equation
(a) in table 13.1 of Shiller (1990),
f(m) = [D(m)R(m) – D(m–1)] / [D(m) – D(m–1)],
where duration is approximated as D(m) = (1 – e –R(m) × m)/R(m). These rates
are linear approximations to the true instantaneous forward rates; see Shiller
(1990). For a discussion of the use of forward rates as indicators of inflation
expectations, see Sharpe (1997). Rates on 3-Month Eurodollar Futures and
Rates on Selected Federal Funds Futures Contracts trace through time the
yield on three specific contracts. Rates on Federal Funds Futures on Selected
Dates displays a single day’s snapshot of yields for contracts expiring in the
months shown on the horizontal axis. Inflation-Indexed Treasury Securities
and Yield Spreads are those plotted on page 3. Inflation-Indexed 10-Year
Government Notes shows the yield of an inflation-indexed note that is
scheduled to mature in approximately (but not greater than) 10 years. The
current French note has a maturity date of 7/25/2015, the current U.K. note
has a maturity date of 4/16/2020, and the current U.S. note has a maturity date
of 11/15/2020. Inflation-Indexed Treasury Yield Spreads and InflationIndexed 10-Year Government Yield Spreads equal the difference between
the yields on the most recently issued inflation-indexed securities and the
unadjusted security yields of similar maturity.
Page 12: Velocity (for MZM and M2) equals the ratio of GDP, measured in
current dollars, to the level of the monetary aggregate. MZM and M2 Own
Rates are weighted averages of the rates received by households and firms
on the assets included in the aggregates. Prior to 1982, the 3-month T-bill
rates are secondary market yields. From 1982 forward, rates are 3-month
constant maturity yields.
Page 13: Real Gross Domestic Product is GDP as measured in chained
2009 dollars. The Gross Domestic Product Price Index is the implicit price
deflator for GDP, which is defined by the Bureau of Economic Analysis,
U.S. Department of Commerce, as the ratio of GDP measured in current
dollars to GDP measured in chained 2009 dollars.

Sources
Agence France Trésor: French note yields.
Bank of Canada: Canadian note yields.
Bank of England: U.K. note yields.
Board of Governors of the Federal Reserve System :
Monetary aggregates and components: H.6 release. Bank credit and components: H.8 release. Consumer credit: G.19 release. Required reserves,
excess reserves, clearing balance contracts, and discount window borrowing:
H.4.1 and H.3 releases. Interest rates: H.15 release. Nonfinancial commercial paper: Board of Governors website. Nonfinancial debt: Z.1 release.
M2 own rate. Senior Loan Officer Opinion Survey on Bank Lending
Practices.
Bureau of Economic Analysis: GDP.
Bureau of Labor Statistics: CPI.
Chicago Board of Trade: Federal funds futures contract.
Chicago Mercantile Exchange: Eurodollar futures.
Congressional Budget Office: Potential real GDP.
Federal Reserve Bank of Philadelphia: Survey of Professional Forecasters
inflation expectations.
Federal Reserve Bank of St. Louis: Adjusted monetary base and adjusted
reserves, monetary services index, MZM own rate, one-year forward
rates.
Organization for Economic Cooperation and Development: International
interest and inflation rates.
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U.S. Department of the Treasury : U.S. security yields.

Page 14: Investment Securities are all securities held by commercial banks
in both investment and trading accounts.
Page 15: Inflation Rate Differentials are the differences between the foreign
consumer price inflation rates and year-over-year changes in the U.S. all-items
Consumer Price Index.
Page 17: Treasury Yields are Treasury constant maturities as reported in the
Board of Governors of the Federal Reserve System’s H.15 release.

20

Research Division
Federal Reserve Bank of St. Louis

Monetary Trends

References
Anderson, Richard G. and Robert H. Rasche (1996a). “A Revised Measure of
the St. Louis Adjusted Monetary Base,” Federal Reserve Bank of St. Louis
Review, March/April, 78(2), pp. 3-13.*
____ and ____(1996b). “Measuring the Adjusted Monetary Base in an Era of
Financial Change,” Federal Reserve Bank of St. Louis Review, November/
December, 78(6), pp. 3-37.*
____ and ____(2001). “Retail Sweep Programs and Bank Reserves, 19941999,” Federal Reserve Bank of St. Louis Review, January/February,
83(1), pp. 51-72.*
____ and ____ , with Jeffrey Loesel (2003). “A Reconstruction of the Federal
Reserve Bank of St. Louis Adjusted Monetary Base and Reserves,”
Federal Reserve Bank of St. Louis Review, September/October, 85(5),
pp. 39-70.*
____ , Barry E. Jones and Travis D. Nesmith (1997). “Special Report: The
Monetary Services Indexes Project of the Federal Reserve Bank of
St. Louis,” Federal Reserve Bank of St. Louis Review, January/February,
79(1), pp. 31-82.*
McCallum, Bennett T. (2000). “Alternative Monetary Policy Rules:
A Comparison with Historical Settings for the United States, the United
Kingdom, and Japan,” Federal Reserve Bank of Richmond Economic
Quarterly, vol. 86/1, Winter.
Motley, Brian (1988). “Should M2 Be Redefined?” Federal Reserve Bank of
San Francisco Economic Review, Winter, pp. 33-51.
Nelson, Charles R. and Andrew F. Siegel (1987). “Parsimonious Modeling of
Yield Curves,” Journal of Business, October, pp. 473-89.
Poole, William (1991). Statement before the Subcommittee on Domestic
Monetary Policy of the Committee on Banking, Finance and Urban Affairs,
U.S. House of Representatives, November 6, 1991. Government Printing
Office, Serial No. 102-82.
Sharpe, William F. (1997). Macro-Investment Analysis, on-line textbook
available at www.stanford.edu/~wfsharpe/mia/mia.htm.
Shiller, Robert (1990). “The Term Structure of Interest Rates,” Handbook of
Monetary Economics, vol. 1, B. Friedman and F. Hahn, eds., pp. 627-722.
Taylor, John B. (1993). “Discretion versus Policy Rules in Practice,” CarnegieRochester Conference Series on Public Policy, vol. 39, pp. 195-214.
Note: *Available on the Internet at research.stlouisfed.org/publications/review/.

Research Division
Federal Reserve Bank of St. Louis

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