WASHINGTON, Aug. 1 (Xinhua) -- Data released by the U.S. Federal Reserve (Fed) on Thursday showed that its M2 money stock increased for the week ending July 22.
M2, the broad money supply, rose to 14.8817 trillion U.S. dollars from the previous week's 14.8272 trillion dollars, while M1, the narrow money supply, rose from 3.8442 trillion dollars to 3.8756 trillion dollars in the same period.
Even though the money liquidity in the U.S. financial market was rising according to the Fed's report, and the central bank cut its benchmark interest rate by 25-basis-point after concluding a two-day meeting on Wednesday just as the market expected, the Fed said there's no guarantee for a series of cuts ahead, adding more pressure to the future growth of M2.
Additionally, U.S. President Donald Trump tweeted on Thursday that he planned to impose more tariffs on Chinese imports, bringing more downside risks to the U.S. economy. The president's remarks also rocked the financial market, driving down many benchmark stock indexes across the world.
Market traders now bet the Fed would lower the interest rate at its policy meeting on Sept. 17-18, according to the Chicago Mercantile Exchange Group FedWatch tool. The probability of a 25-basis-point rate cut is close to 85 percent, according to the tool.
M1 is commonly known as a measure of money supply, which includes cash and checking deposits. M2, the most critical indicator of money supply and inflation, includes all elements of M1 as well as savings deposits, money market securities, mutual funds, and other time deposits.
