Strength of US broad money growth is encouraging

Total US non-financial business borrowing, including bond issuance as well as loans from banks, increased by around $200bn in the fourth quarter, which was the biggest quarterly gain since 2008. 

Households are still lagging behind a little. Although the private sector is increasing its debt level, the overall credit market debt-toGDP ratio, including the public sector as well, remains a long way below its peak in 2009. 


The Fed's asset holdings remain broadly unchanged at $4,300bn, with reserve balances averaging close to $2,700bn. 

Capital Economics notes ....

• The further acceleration in broad money growth in February is indicative of a strengthening real economic recovery that will eventually put more upward pressure on underlying inflation. 
  
  
• The annual growth rate of our own measure of the broadest M3 aggregate edged up to a seven-month high of 6.1% in February.
  
  
• Admittedly, the growth rate of bank loans did slow slightly last month. Nevertheless, the 7.8% increase over the past 12 months is still unusually strong. The strength is widespread, with even residential mortgages now expanding.