Money Supply Rate Soars In January: Money Supply
The money supply measure the Federal Reserve has been watching most closely for setting monetary policy rose at a 291 -ÐÊ> percent annual rate in January, apparently largely because of a huge flow of funds into the new money market deposits ac- _ counts.</br></br>The FedÛªs policymaking group, the Federal Open Market Committee, decided on Jan. 28 not to respond by tightening conditions in financial markets because a staff analysis said the enormous popularity of the money market deposit accounts was to blame.</br></br>Deposits in the new afccounts, which were first available Dec. 14, reached $232.2 billion in the week ended Feb. 2 as the closely watched money measure, M-2, rose $48.1 billion in January. Most of the funds in the new accounts came from other accounts and certificates of deposit already part of M-2. '</br></br>The FOMC also met this week for two days to decide upon money growth targets for 1983, which Fed Chairman Paul A. Volcker will disclose next Wednesday in testimony to the Senate Banking Committee.</br></br>Separately, the Fed announced that it has changed the definition of M-2 slightly and that it has revised figures for 1982 both for that reason and because of a recalculation of seasonal adjustment factors.