Why do they even publish the data, and how trustworthy is it? Like changing M1 by adding savings during massive printing seemed like intentional timing to obfuscate it. But since they're the ultimate authority and will never be audited, why don't they just lie instead of doing shenanigans?
Discussion
For the M1 thing I donāt blame them, personally. The definition of a āsavings accountā (excluded from M1) was an account that earned interest and had limited withdrawals. Peopleās 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 everyoneās āsavingsā 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 donāt blame them is that the limited withdrawal requirement worked fine as an M1/M2 discriminator until it suddenly didnāt.
Donāt get me wrong. I donāt like the Fed. Iām in favor of abolishing the Fed entirely. I just donāt blame them for the M1/M2 discontinuity in May of 2020, specifically. It could have been handled better, but I donāt think it was an intentional deception.