On inflation, the money supply tells the tale

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IT’S THE MONEY: Why is no one else talking about this? The pundits might lately be saying that inflation is set to surge again, but former Western Asset Management chief economist Scott Grannis points out that the money supply perhaps has other views on the matter:

Grannis elaborates:

Since its peak in April ’22, M2 has declined by almost $1 trillion. This all adds up to the biggest seesaw in U.S. monetary history. As the dust continues to settle we see that a lot of the excess growth in M2 has been absorbed by a bigger economy and suppressed by higher interest rates, which have boosted the public’s willingness to hold onto the extra money. The question now is not whether inflation will rise, but rather how much further it will decline. [Emphasis added.]

I totally buy this. It sure seems to make more sense than obsessing over some monthly economic release or other.