Macro: Money and Liquidity

A practical guide to using money and credit aggregates with policy plumbing to infer liquidity regimes and risk-asset performance.

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Overview

This source bundles seven series that map the money supply, bank credit, and the Fed’s operating framework:

• BOGMBASE — Monetary Base
• M1SL — M1 Money Stock
• M2SL — M2 Money Stock
• WRESBAL — Reserve Balances with Federal Reserve Banks
• RRPONTSYD — Overnight Reverse Repurchase Agreements
• TOTBKCR — Total Bank Credit
• WALCL — Federal Reserve Total Assets (the balance-sheet size itself: QE/QT in one series)

Why it matters: liquidity is the lifeblood of risk assets. Changes in reserves, reverse repo usage, and bank credit growth shape dollar liquidity, discount rates, and leverage. Crypto and high-beta equities tend to respond quickly to shifts in USD liquidity.

FRED attribution: This product uses the FRED® API but is not endorsed or certified by the Federal Reserve Bank of St. Louis.

Quick links:

• Monetary Base BOGMBASE on FRED — note methodology/discontinuation notes where applicable
• M1 M1SL on FRED and Fed H.6 release Money Stock Measures
• M2 M2SL on FRED and Board notes on 2020 reclassification H.6 FAQs
• Reserves WRESBAL on FRED and Fed H.4.1 Factors Affecting Reserve Balances
• ON RRP RRPONTSYD on FRED and NY Fed ON RRP FAQ
• Bank Credit TOTBKCR on FRED and Fed H.8 Assets and Liabilities of Commercial Banks
• Fed Total Assets WALCL on FRED and Fed H.4.1 Factors Affecting Reserve Balances

Data notes:

• M1/M2 underwent a major definitional shift in 2020 when savings deposits were reclassified; interpret long-term charts cautiously. See H.6 FAQs.
• The adjusted monetary base series from St. Louis Fed has discontinuities; check FRED notes on BOGMBASE.
• Reserves and ON RRP are high-frequency gauges of liquidity plumbing; they can swing around quarter-end and policy events.

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Series Deep Dives

BOGMBASE — Monetary Base

• What it captures: currency in circulation plus reserves at the Fed. Historically the “high powered money.”
• Caveat: the St. Louis Adjusted Monetary Base series was discontinued/modified; rely on BOGMBASE notes and cross check with H.4.1 factors.
• Trading use: big swings around QE/QT and crises. Directionally related to reserves; reserves are the cleaner gauge in the current framework.

M1SL and M2SL — Money Stocks

• Definitions: see H.6 release for precise components. 2020 reclassification moved savings deposits to M1, creating a level shift in M1.
• Interpretation: M2 growth often correlates with liquidity waves, but velocity shifts and portfolio substitutions can dominate.
• Useful transforms: YoY and 3m annualized growth, and changes relative to a long term trend (z scores) to mitigate regime shifts.
• Links: M1SL, M2SL, H.6 FAQs.

WRESBAL — Reserve Balances with Federal Reserve Banks

• What it captures: aggregate deposits of depository institutions at the Fed (excludes currency). See WRESBAL and H.4.1.
• Role: primary liquidity buffer in the floor system. Sensitive to QT, Treasury cash balance swings, and ON RRP dynamics.
• Trading use: rising reserves tend to coincide with looser financial conditions; sharp drains can pressure risk assets and funding markets.

RRPONTSYD — ON RRP Balance

• What it captures: outstanding overnight reverse repos conducted by the Fed. See RRPONTSYD and ON RRP FAQ.
• Role: absorbs excess cash from money funds and others; provides a floor to money market rates.
• Trading use: rising ON RRP can indicate surplus cash parked risk free; falling balances can release liquidity into private markets and support risk.

TOTBKCR — Total Bank Credit

• What it captures: loans and securities on bank balance sheets (H.8). See TOTBKCR and H.8 release.
• Role: credit creation channel into the real economy; closely watched during tightening cycles for cracks.
• Trading use: decelerating or contracting bank credit is a late cycle and recessionary signal; watch regional bank stress periods.

WALCL — Federal Reserve Total Assets

• What it captures: the size of the Fed's entire balance sheet (Treasuries, MBS, and other holdings), reported as of each Wednesday. See WALCL and H.4.1.
• Role: the direct, single-number readout of QE (rising) vs QT (falling) — where BOGMBASE and WRESBAL are downstream effects of balance-sheet policy, WALCL is the policy lever itself.
• Trading use: sustained WALCL expansion/contraction is the cleanest liquidity-regime signal in this set; watch the pace of change (weekly/monthly delta) more than the level.
• Cadence: published weekly (Wednesday level); do not expect daily movement.

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References and Further Reading

• FRED: BOGMBASE, M1SL, M2SL, WRESBAL, RRPONTSYD, TOTBKCR
• Fed H.6: Money Stock Measures and H.6 FAQs
• Fed H.4.1: Factors Affecting Reserve Balances
• Fed H.8: Assets and Liabilities of Commercial Banks
• NY Fed: ON RRP FAQ