M3: I wonder what it looks like today

By Edward Harrison On Jun 11, 2008

You know, the Federal Reserve stopped publishing M3 for some strange reason back on 23 Mar 2006.

At the time, they said the following:

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.
–Federal Reserve web site

hmmm….

The chart below shows the entire data series of M3 from Jan 1960-Feb 2006, measuring y-o-y growth. It’s interesting to note that M3 plummeted around two recessions, 1970 and 1990-91. Year-on-year M3 growth actually went negative only once: 1993.

Notice the huge spikes in M3 in 1970 and 1993. The Fed turned on the afterburners. Their policy was especially inflationary in 1998 and 2000-2001 in order to stave off the Asian contagion and tech wreck of that day. M3 sees a huge downshift during Volcker’s reign (1979-1987), followed by a huge up-shift from 1993 to the tech wreck in 2001.

I wonder what M3 looks like today.