NEW YORK — The nation's basic money supply rose $1.7 billion in mid-May, the Federal Reserve Board reported Thursday, giving the credit markets a surprise.
Traders had been expecting the money supply to show little change. Bond prices, which were up a bit for the day, dipped on the news but recovered quickly. Interest rates remained mixed.
The Fed said the basic money supply, known as M1, rose to a seasonally adjusted $660.5 billion in the week ended May 26 from $658.8 billion in the previous week. M1 represents money readily available for spending and includes cash in circulation, deposits in checking accounts and non-bank travelers checks.
For the latest 13 weeks, M1 averaged $646.1 billion, an 11.6% seasonally adjusted annual rate of gain from the previous 13 weeks.