Broad money growth is showing tentative signs of stabilising at very depressed levels…
Despite still-rapid growth in narrow liquidity, broad money growth remains extremely depressed, although there are tentative signs that the growth rate is flattening out.
Broad money growth across the G7 has stabilised at around 2% y/y, its lowest level for at least 25 years. The combination of fast narrow money growth and sluggish broad money growth means a continued slide in the money multiplier.
Canada and Japan are showing the fastest broad money growth rates at 5.9% and 5.0% y/y, respectively. The UK and eurozone, with broad money growth at close to zero, are the laggards. US broad money growth has picked up to almost 2% y/y, although it remains below the 6% y/y pace registered in late 2009.Click on chart to enlarge, courtesy of BNP Paribas.
Continued slide in the money multiplier?