Money Supply Expands by $1 Billion
NEW YORK, Oct. 30ÛÓThe measure of the nation's money supply known as Ml-B rose $1 billion in the week ended Oct, 21, and the Federal Reserve gave a dear signal that it intends to restimulate still-sluggish money growth.</br></br>After the market closed the Fed announced it had cut the discount rate it charges banks for loans to 13 percent from 14 percent. It left in place the 2 percent surcharge for large and frequent borrowers.</br></br>Ml-B, which is comprised of cash in circulation, checking accounts and NOW accounts, rose to å¤434.3 billion in the week from $433.3 billion the previous week.</br></br>In normal times, a $1 billion increase in Ml-B would be enough to send interest rates soaring out of fears of further Fed credit-tightening. But despite the latest rise, monetary growth continues to be well below the FedÛªs minimum targets.</br></br>For the latest four weeks, Ml-B averaged $432.3 billion, a 2.9 percent seasonally adjusted rate of gain from 13 weeks ago.