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EndGame Macro
Two charts, one message…Money got expensive, and now the bill is arriving
The first chart, the call money interbank rate is basically the heartbeat of the financial system. It’s the overnight price of dollars between banks. When the Fed tightens, this thing shoots up. When the system starts to feel the strain or the Fed begins easing, it rolls over. Sitting around 4.1% now tells you the max tightening phase is already behind us, and the short end of the market is being walked down.
The second chart, M2 velocity isn’t literally how fast people spend money. It’s a ratio of nominal GDP divided by M2. It rises when economic output grows faster than the money supply, and it falls when people hoard cash or when M2 balloons faster than the economy. What you’re seeing now is velocity recovering from the COVID collapse and then flattening out once policy stayed tight long enough to cool demand.
Why these two lines move together, and why it matters
These charts correlate because they’re both reacting to the same underlying forces of policy, credit creation, and how much risk the private sector is willing to take.
• In 2020, rates went to zero and M2 exploded. People sat on cash, activity lagged, and velocity collapsed.
• In 2022–2024, rates ripped higher while M2 growth slowed. Nominal spending kept going. That combination mechanically pushed velocity up.
• By mid-2024 and into 2025, both charts started flattening and rolling because the cycle shifted…tight money finally did its job, demand cooled, and now funding costs are easing not because everything is fine, but because the economy is losing momentum underneath.
So yes, they’re connected. Velocity isn’t causing the call money rate to fall, and the call money rate isn’t causing velocity to flatten. They’re both responding to the same turning point in the economy.
And here’s what it means for all of us
If rates keep easing and velocity doesn’t pick back up, that usually means cheaper money is meeting a cautious, slowing private sector with more saving, fewer transactions, and weaker economic force behind the scenes. It’s the setup you see when the cycle transitions from inflation heat to growth fatigue, long before the headline data admits it.
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Two charts, one message…Money got expensive, and now the bill is arriving
The first chart, the call money interbank rate is basically the heartbeat of the financial system. It’s the overnight price of dollars between banks. When the Fed tightens, this thing shoots up. When the system starts to feel the strain or the Fed begins easing, it rolls over. Sitting around 4.1% now tells you the max tightening phase is already behind us, and the short end of the market is being walked down.
The second chart, M2 velocity isn’t literally how fast people spend money. It’s a ratio of nominal GDP divided by M2. It rises when economic output grows faster than the money supply, and it falls when people hoard cash or when M2 balloons faster than the economy. What you’re seeing now is velocity recovering from the COVID collapse and then flattening out once policy stayed tight long enough to cool demand.
Why these two lines move together, and why it matters
These charts correlate because they’re both reacting to the same underlying forces of policy, credit creation, and how much risk the private sector is willing to take.
• In 2020, rates went to zero and M2 exploded. People sat on cash, activity lagged, and velocity collapsed.
• In 2022–2024, rates ripped higher while M2 growth slowed. Nominal spending kept going. That combination mechanically pushed velocity up.
• By mid-2024 and into 2025, both charts started flattening and rolling because the cycle shifted…tight money finally did its job, demand cooled, and now funding costs are easing not because everything is fine, but because the economy is losing momentum underneath.
So yes, they’re connected. Velocity isn’t causing the call money rate to fall, and the call money rate isn’t causing velocity to flatten. They’re both responding to the same turning point in the economy.
And here’s what it means for all of us
If rates keep easing and velocity doesn’t pick back up, that usually means cheaper money is meeting a cautious, slowing private sector with more saving, fewer transactions, and weaker economic force behind the scenes. It’s the setup you see when the cycle transitions from inflation heat to growth fatigue, long before the headline data admits it.
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Offshore
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Fiscal.ai
Adobe is accelerating its share buybacks.
They have reduced their share count by 5.6% over the last 12 months.
$ADBE https://t.co/ZdaBO6NmfB
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Adobe is accelerating its share buybacks.
They have reduced their share count by 5.6% over the last 12 months.
$ADBE https://t.co/ZdaBO6NmfB
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When you're having a good day but someone your age says they just bought a house https://t.co/N5iprIfnwP
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