For the M1 thing I don’t blame them, personally. The definition of a “savings account” (excluded from M1) was an account that earned interest and had limited withdrawals. People’s savings accounts, prior to 2020, met this requirement. After 5 or 6 withdrawals in a month, you had to pay a penalty.

In May of 2020, the Fed declared that people could make unlimited withdrawals from savings without penalty. With that rule change, suddenly everyone’s “savings” accounts counted in M1, causing that metric to go vertical.

In response, the Fed created an updated M1 metric which dropped the limited withdrawal requirement. The reason I don’t blame them is that the limited withdrawal requirement worked fine as an M1/M2 discriminator until it suddenly didn’t.

Don’t get me wrong. I don’t like the Fed. I’m in favor of abolishing the Fed entirely. I just don’t blame them for the M1/M2 discontinuity in May of 2020, specifically. It could have been handled better, but I don’t think it was an intentional deception.