Monetary Bases Increases 1.1 Percent in February
In February 2016, the monetary base was $3.891 trillion. This was the third month in a row that the monetary base below $4 trillion. It had been above $4 trillion seven of the previous 11 months. Compared with one year ago, the monetary base increased 1.1 percent. It had contracted the previous two months. As a result, the annual growth in the monetary base was nudged up to 0.2 percent from 0.1 percent, which staved off an annual contraction in the monetary base for the first time since December 1950. It will likely be necessary for the the rate of change in the monetary base to contract if the Fed wants to continue to raise interest rates. This is uncharted territory for almost everyone alive and could cause all sorts of surprising reactions in the economy.
The U.S. dollar exchange rate is indicating that the money supply should grow at an accelerating rate in 2016. However, the dollarhas begun to grow at a decelerating rate compared with other major currencies. Therefore, the monetary base's growth may be somewhat muted.
You can see how the monetary base leads various machine tool sales and consumption data as well as primary plastics processing equipment at our monetary page.blog comments powered by Disqus