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The St. Louis Monetary Base:

Released Monthly
Released by FRED (Federal Reserve Economic Data)

Aptly named because of its creation by the St. Louis Federal Reserve¹, this indicator measures the index of currency and reserves held by banks.   While this seems trivial, it is indeed an important tool, if not in predicting economic fluctuations, but observing them.   For example, the base looks at reserves in banks and cash held by banks.  This money is money that can be lent.  With increased lending we see the potential for increases in the money supply (and for all you neo-classicists) this means increases in aggregate demand.  As we know, growth in aggregate demand without increases in aggregate supply may show up as inflation.  Incidentally, the monetary base can be directly influenced by the actions of the Federal Reserve, which can increase or decrease the money supply through bond purchases and sales on the open market or through the change in reserve requirements (this is hardly ever used).

The data series for the St. Louis Monetary Base comes in both a seasonally and a non-seasonally adjusted from.  Both series track each other almost perfectly and there is little need for comparison amongst the two.   

[1] It is interesting to note that the regional Federal Reserve Banks serve several purposes.   Aside from adding input from each region of the country they also add their own different views into the fashioning of policy.  The St. Louis district Federal Reserve Bank is know for it’s heavy research of monetary aggregates and publications such as the monetary trends magazine.  Further information may be obtained from their website

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