Severe weather has slowed the economy resulting in a drop in our Business Cycle Conditions indicators, but we believe the effects are temporary.
Although the economic expansion has slowed, both consumers and producers remain optimistic. In the short run, this optimism means the expansion will continue. It is likely to strengthen later in the year as consumer demand buoys economic activity.
Despite the Fed’s breathtaking increase of base money since the autumn of 2008, the money stock as measured by conventional concepts such as M2 has not increased greatly