Here’s some interesting data the Fed is surely looking at.
The monetary base has been flat lining since the end of QE2 – i.e., the balance sheet growth of the Federal Reserve has not been above long-term growth. May explain the punk performance of gold.
The monetary aggregates, as reflected in M2 growth, though healthy, has slowed somewhat. Bank credit is growing at about 5 percent y/y, which reflects a slow healing of the financial sector, but still not at 100 percent health.
Furthermore, the shadow banking system is a still a shadow of its former itself with respect to credit expansion. Thus, relatively flat base growth and slowing M2 (though less relevant) makes us think the Fed will remain aggressive. Stay tuned.