{"id":2698,"date":"2008-11-27T17:39:32","date_gmt":"2008-11-27T17:39:32","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2698"},"modified":"2025-03-27T15:48:45","modified_gmt":"2025-03-27T15:48:45","slug":"glimmers-of-hope-from-m1-pick-up","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2698","title":{"rendered":"Glimmers of hope from M1 pick-up"},"content":{"rendered":"<p>Cuts in interest rates reduce the opportunity cost of holding money in more liquid forms. Narrow money M1 &ndash; currency and checkable deposits &ndash; usually picks up relative to broader measures like M2 and M3. This is a sign that the change in interest rates is affecting behaviour and often precedes a recovery in economic activity.<\/p>\n<p>US real M1 typically leads turning points in the economic cycle by 6-12 months &ndash; see first chart. Its annual rate of change bottomed in May and moved up sharply in September and October. Recent figures may have been artificially boosted by a flight of cash from money market funds. However, a further recovery in November and December would suggest an approaching trough in economic activity.<\/p>\n<p>Eurozone figures released today also show M1 picking up, with a particularly large rise in October &ndash; see second chart. UK data will be available on Monday.<\/p>\n<p>Note that M1 &ndash; unlike the monetary base &ndash; does not include bank reserves held at the central bank, so is not directly affected by &ldquo;quantitative easing&rdquo;.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/US-industrial-output1108.jpg?__SQUARESPACE_CACHEVERSION=1227862895680\" alt=\"\" \/><\/span><\/span><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/Euroland-money-M1-1108.jpg?__SQUARESPACE_CACHEVERSION=1227862937667\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cuts in interest rates reduce the opportunity cost of holding money in more liquid forms. Narrow money M1 &ndash; currency and checkable deposits &ndash; usually picks up relative to broader measures like M2 and M3. This is a sign that the change in interest rates is affecting behaviour and often precedes a recovery in economic [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2698","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2698"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2698\/revisions"}],"predecessor-version":[{"id":5007,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2698\/revisions\/5007"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}