The Recent Surge in Money Growth: What Would Milton Friedman Say?

The M2 money supply in the U.S. grew at annualized rates exceeding 20% throughout much of 2020.(1) Money growth eased somewhat in 2021, but it continues to run at rates well above 10% per year. In total, M2 stands almost 40% higher today than at the end of 2019. And as can be seen in Figure 1, nothing like this has been seen for quite some time, at least not since 1960 and not even during the high-inflation years of the 1970s.