Capital Markets Summer 2022: Revealing Recession Patterns

III

Slowing Money Supply Economic Crosscurrents

• The increase in the Federal Funds rate, decrease in the Federal Reserve’s assets, and slowdown in government spending is constricting money supply growth and moderating economic activity

I

II

Money Supply Growth

Actual

Forecasted

R 2 =77%

25%

III

20%

15%

IV

10%

Money supply may shrink for the first time since the 1930s

5%

0%

V

-5%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Source: Piper Sandler and Alger. Last actual data point is May 2022. Forecast based on year-over-year change in Federal Funds rate, Federal Reserve’s assets, and U.S. Federal Expenditures.

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