M2 Contraction and Dollar Strength Reshape Market Risk
Money supply contraction and a surging dollar are reshaping how risk assets perform. According to Federal Reserve data via FRED, the M2 money stock contracted 2.3% year-over-year to $23.2 trillion in July while the ICE dollar index strengthened to 118.75, this creates a tighter liquidity environment that weighs on equities, precious metals, and bonds alike in Wednesday's session. This combination suggests the Fed's restrictive stance is working through the real economy even as the policy rate holds steady at 3.63%.
Key Takeaways M2 money supply contracted 2.3% YoY to $23.2 trillion in July per FRED. ICE dollar index strengthened to 118.75, pressuring risk assets. SPY fell 0.69% and QQQ droppe…
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