Federal Reserve Watch: Some Rough Times Ahead

Summary

Concern has been raised about the year-over-year decline in the M2 money stock.
This decline needs to be considered along with the decline in the velocity of circulation of the M2 money stock which has, so far, offset the decline, itself.
The Federal Reserve may have to deal with more money “sloshing around” the banking system than it originally thought when it began to “tighten up.”
Otherwise, the Fed seems to be on target with reducing the size of its securities portfolio and seems to be managing its interest rate increases well.
There is still a lot going on in the economy and in the financial markets that may lead to a lot of problems to be faced by the Fed in the near future.

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