U.S. Fed's M2 money stock rises last week: report

Source: Xinhua| 2019-08-09 11:23:12|Editor: Shi Yinglun
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WASHINGTON, Aug. 8 (Xinhua) -- Data released by the U.S. Federal Reserve (Fed) on Thursday showed that M2 money stock increased for the week ending July 29.

M2, the broad money supply, rose to 14,916.8 billion U.S. dollars from the previous week's 14,881.1 billion dollars, while M1, the narrow money supply, dropped from 3,875.5 billion dollars to 3,870.6 billion 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 on July 31, the Fed said there is no guarantee for a series of cuts ahead, citing more pressure to the future growth of M2.

Additionally, U.S. President Donald Trump tweeted last Thursday that he planned to impose more tariffs on Chinese imports, bringing more downside risks to the U.S. economy and driving down many benchmark stock indexes across the world.

Currently, market traders 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 74 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.