Monetary Indicators Monitor (Jun.)

The various monetary aggregates show broad money growth is both strong and stable which, at the margin, makes a third round of quantitative easing look less warranted. In contrast, our own M3 measure was still contracting when the Fed announced QE2 in the second half of 2010. That said, the Fed has always been careful to downplay the impact of its asset purchases on the money stock, focusing instead on the downward impact those purchases have on long-term interest rates.