Shrinking Supply

From 11/03 through 2/20, M2, a money stock measure including cash, checking and savings accounts, and money market funds grew 5.9%/year. Between 3/20 and 2/22, the worst of Covid-19, it grew 18.2%/year, three times as quickly, and peaked at 26.9% growth/year in 2/21. Now, M2 is growing by 2.6%/year and has been steadily falling since 8/21. After inflation, M2 is shrinking by almost 6%/year, a rate perfectly correlated with recessions.