Raising interest rates AND printing tons of money

Interest rates suggest tightening. Money supply growth suggest easing. Which one is it?

 

Raising interest rates AND printing tons of money - what kind of a strategy is that.

 

money supply has to grow forever or else the whole thing collapses.

 

i found one of these the other day

 

M3?? what M3??

 

M3 includes eurodollars. Eurodollars are dollars in foreign bank accounts and can not be managed by the Federal Reserve Bank of the USA. Might be better to study M2.

Attached is a weekly graph of Federal Funds futures prices. Federal Funds futures prices are inverse to yield; if Federal Funds price decreases then interest rate increases. I interpret the graph as Federal Funds futures price decreasing until June 2006 then remaining about unchanged. I interpret the graph as yields increasing until June 2006 then remaining about unchanged.

If government debt is increasing and short term interest rates remain unchanged then money supply must increase, correct?

 

No. Issuance of government debt doesnt increased the money supply. Its a transfer from a person holding dollars to the treasury. Now if its a increase of debt held by the Fed then it might mean a increase in money supply