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  • Ratio, Quarterly, Seasonally Adjusted

    Calculated as the ratio of quarterly nominal GDP (GDP (https://fred.stlouisfed.org/series/GDP)) to the quarterly average of M1 money stock (M1SL (https://fred.stlouisfed.org/series/M1SL)) The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. The frequency of currency exchange can be used to determine the velocity of a given component of the money supply, providing some insight into whether consumers and businesses are saving or spending their money. There are several components of the money supply,: M1, M2, and MZM (M3 is no longer tracked by the Federal Reserve); these components are arranged on a spectrum of narrowest to broadest. Consider M1, the narrowest component. M1 is the money supply of currency in circulation (notes and coins, demand deposits, and other liquid deposits). A decreasing velocity of M1 might indicate fewer short- term consumption transactions are taking place. We can think of shorter- term transactions as consumption we might make on an everyday basis. Beginning May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately. For more information on the H.6 release changes and the regulatory amendment that led to the creation of the other liquid deposits component and its inclusion in the M1 monetary aggregate, see the H.6 announcements (https://www.federalreserve.gov/feeds/h6.html) and Technical Q&As (https://www.federalreserve.gov/releases/h6/h6_technical_qa.htm) posted on December 17, 2020. The broader M2 component includes M1 in addition to saving deposits, certificates of deposit (less than $100,000), and money market deposits for individuals. Comparing the velocities of M1 and M2 provides some insight into how quickly the economy is spending and how quickly it is saving. MZM (money with zero maturity) is the broadest component and consists of the supply of financial assets redeemable at par on demand: notes and coins in circulation, traveler’s checks (non-bank issuers), demand deposits, other checkable deposits, savings deposits, and all money market funds. The velocity of MZM helps determine how often financial assets are switching hands within the economy.

  • Ratio, Biweekly, Seasonally Adjusted

    Updates of this series will be ceased on December 19, 2019. There is no direct replacement to this seasonally adjusted series. Interested users can construct a proxy of the series as the ratio of M1 from the H.6 release and the monetary base from the H.3 release. The discontinued series plotted on the same graph with the calculated data can be accessed for comparison here (https://fred.stlouisfed.org/graph/?g=wroO). For more details, see the FRED Announcement (https://news.research.stlouisfed.org/2019/12/discontinuance-of-st-louis-monetary-base-and-reserves-data/).

  • Billions of 1982-84 Dollars, Monthly, Seasonally Adjusted

    This series deflates M1 money stock (https://fred.stlouisfed.org/series/M1SL) with CPI (https://fred.stlouisfed.org/series/CPIAUCSL).

  • Billions of Dollars, Monthly, Seasonally Adjusted

  • Billions of Dollars, Monthly, Seasonally Adjusted

    The MSI measure the flow of monetary services received each period by households and firms from their holdings of monetary assets (levels of the indexes are sometimes referred to as Divisia monetary aggregates).

  • Percent, Monthly, Not Seasonally Adjusted

    Preferred benchmark rate equals 100 basis points plus the largest rate in the set of rates. Alternative benchmark rate equals the larger of the preferred benchmark rate and the Baa corporate bond yield.

  • Billions of Dollars, Monthly, Seasonally Adjusted

    The MSI measure the flow of monetary services received each period by households and firms from their holdings of monetary assets (levels of the indexes are sometimes referred to as Divisia monetary aggregates). Preferred benchmark rate equals 100 basis points plus the largest rate in the set of rates. Alternative benchmark rate equals the larger of the preferred benchmark rate and the Baa corporate bond yield.

  • Percent, Monthly, Not Seasonally Adjusted

    Preferred benchmark rate equals 100 basis points plus the largest rate in the set of rates. Alternative benchmark rate equals the larger of the preferred benchmark rate and the Baa corporate bond yield.


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