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No. 012 Latest feature

Wednesday, 30 September 2026

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Author
Dorian Sotpyrc
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7 minutes · Opinion
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Opinion · US data to June 2026

Opinion · Money & Banking

The Great Print: What the Data Shows About Money Printing in the West

US broad money grew 40% in two years. Consumer inflation peaked sixteen months after money growth did. I think the surge belongs in the inflation story alongside supply shocks, and the cost mattered most to households with little room to absorb it.

References

Minimal animated illustration. A small printing press feeds banknotes onto a growing stack labelled Money. A price tag on a pole to the right starts low and rises later, after the stack has grown.

Illustration · Money first, prices laterEditorial

Money surged in 2020–21; consumer inflation peaked in June 2022. The sequence is clear. How much money caused the rise needs more evidence.

My opinion on the data
In this article · 7 sections
  1. 01The story people tell
  2. 02What “printing” means
  3. 03The surge, in five economies
  4. 04From money to prices
  5. 05Who paid
  6. 06After the Great Print
  7. 07What I take from it
Confirmed

The surge was real

US M2 rose from $15.35 trillion in December 2019 to $21.50 trillion in December 2021, a rise of 40%. Growth peaked at 26.8% a year in February 2021.1

My view

Money and supply shocks both mattered

Consumer inflation peaked sixteen months after money growth did. Energy, food and reopening also mattered. I think the honest reading keeps money and supply shocks in view together.

Open question

How much was money?

The timing alone cannot tell us how much inflation came from monetary demand, reopening or supply shocks. Establishing that split needs more than two lines on a chart.

In 2020 and 2021, the central banks of the West did something they had never done at this scale in peacetime. By the end of it, roughly 29 cents of every dollar of US broad money had been created in the previous two years. The phrase people reached for was “money printing”, and it has been argued over ever since. I think the phrase is a bad description and a fair warning.

This piece is the 2026 edition of an article first published on 2 December 2025. I have kept its structure, updated the data to June 2026, and asked a harder question of it: how much weight the money numbers deserve now that the dust has settled.

§ 01The story people tell about “money printing”

The popular version is short. Governments and central banks created huge amounts of money, prices rose, and everyone got poorer. Versions of it circulated with claims that between 20 and 40 per cent of all dollars in existence were created in a couple of years.

Check the arithmetic and the claim is closer to true than its critics allow. US M2 was $15.35 trillion at the end of 2019 and $21.50 trillion at the end of 2021.1 That is a 40% rise in two years, and it means about 29% of the end-2021 stock was new. The claim only goes wrong when it treats all of that money as cash from a press. Most of it was bank deposits.

§ 02What economists mean by money, and by “printing”

Base money, broad money and deposits. Base money is currency in circulation and the reserve balances commercial banks hold at the central bank. Broad money measures currency held by the public, deposits and other liquid balances: M2 in the United States, M3 in the euro area. Bank reserves are not part of those broad-money measures. When a bank makes a loan, it creates a deposit. Broad money can grow without a single new note.3

Three engines at once. In 2020 three things ran together. Central banks bought bonds through quantitative easing, which added reserves; purchases from non-bank sellers could also add bank deposits. Governments ran large deficits paid for by selling bonds, and the cheques landed in bank accounts. Banks kept lending.43 No single one of them is “the printing”, and that matters for what came next.

§ 03The Covid money surge in the US, Europe, the UK, Australia and Canada

In the United States the jump was unmistakable. The year-on-year growth rate of M2 was 6.7% in December 2019, reached 22.8% by June 2020 and 24.5% by December 2020, and peaked at 26.8% in February 2021.1

Large bond-purchase programmes were part of the response in all five economies. The figures below show the scale reported by each central bank, with the programme and date stated alongside each amount.

Selected bond-purchase figures from the pandemic response; currencies, programmes and reporting dates differ
EconomyReported amountProgramme and scope
United StatesUS$4.4 trillionFed bond acquisitions since February 2020, reported in January 2022.5
Euro areaAbout €1.7 trillionNet PEPP purchases from March 2020 through March 2022; excludes the separate APP.13
United Kingdom£895 billionTotal QE bond purchases, including rounds before the pandemic; £875 billion government and £20 billion corporate bonds.7
AustraliaA$280.7 billionBond Purchase Program, November 2020 to February 2022; excludes earlier market-function and yield-target purchases.6
CanadaMore than C$180 billionGovernment of Canada Bond Purchase Program, from its March 2020 launch to the December 2020 report.8

These are programme snapshots, not a ranking of comparable totals. The UK figure includes older QE; the other rows cover different periods and assets. None is a measure of broad-money growth. The distinction matters: bond buying, fiscal spending and bank lending work through different channels, so a larger purchase programme need not produce a larger rise in deposits.34

§ 04From the money surge to the inflation that followed

The monthly series puts the US M2 growth peak at 26.8% in February 2021. Consumer price inflation, calculated from the seasonally adjusted CPI index, peaked at 9.0% in June 2022, sixteen months later.12 The chart uses quarter-end readings, which put its highest sampled M2 growth point in December 2020; that is not the monthly peak. By the end of 2021 consumer prices were 8.6% above their end-2019 level, and by June 2026 they were 28.6% above it.2

Line chart of US money growth and consumer price inflation, quarter-end readings from 2019 to mid-2026. Money growth (M2) rises from 6.7% in December 2019 to 24.5% in December 2020, falls below zero in late 2022, reaches minus 3.9% in early 2023, and recovers to 5.3% by June 2026. Consumer price inflation peaks around 9.0% in June 2022, sixteen months after the monthly money-growth peak, and is 3.5% in June 2026. Official data, with year-on-year rates calculated by PLEXData.

Fig. 1 · US money growth and pricesOfficial data

Money growth peaked in 2020–21 and went negative in 2023. Prices peaked in mid-2022. By June 2026 M2 was growing 5.3% a year and CPI inflation was 3.5%.

Quarter-end readings · FRED, seasonally adjusted

The timing is consistent with a delayed monetary effect, but it does not establish one. Energy and food prices also surged, and reopening demand ran into constrained supply. OECD-area headline inflation peaked at 10.7% in October 2022.9 The OECD’s household study found that energy prices drove much of the purchasing-power loss in countries including Denmark, Italy and the United Kingdom.10

My position, with US data through June 2026, is that both camps were partly right, and the argument between them was less useful than it looked. The money surge made the economy easier to push prices up in. The supply shocks lit the match. How much each economy paid depended on how large both were.

§ 05How high inflation hit younger households

Inflation is not one rate. Renters and first-time buyers meet it through rent, mortgage payments, childcare, food and energy. Owners with fixed-rate mortgages and assets that rose in value met it very differently.

The housing evidence gives this argument firmer ground. The RBA reported in March 2023 that around half of Australian renter-household heads were aged 25 to 44. Renters also tended to have lower incomes, less wealth and smaller savings buffers than owner-occupiers.11 In Great Britain, an ONS survey covering 8 February to 1 May 2023 found that 43% of renters had difficulty affording their rent, compared with 28% of mortgage holders reporting difficulty with mortgage payments.12 These are specific household findings, not a claim that every young person paid the same cost.

An OECD study of purchasing-power losses between August 2021 and August 2022 found that inflation weighed more heavily on low-income than high-income households in every country it examined. It also found substantial exposure among rural households; it did not establish a universal ranking by age.10 That matches how I think about it. The same shock that raised the price of a flat did nothing to the wages of someone trying to rent one, and people who owned assets had a cushion that people who owned nothing did not.

§ 06After the Great Print: QT, higher rates and the long tail

The reversal came quickly. Central banks moved from emergency easing to quantitative tightening, and raised policy rates. US M2 fell from its pre-contraction high of $21.79 trillion in March 2022 and was down 3.9% on a year earlier by March 2023, the sharpest contraction of the period in the data I pulled.1 It did not stay negative. US M2 growth was 4.0% in December 2025, and 5.3% by June 2026.1

By June 2026, broad money was 6.1% above its March 2022 high, and consumer inflation was 3.5%.12 Money growth had slowed markedly from the pandemic surge. A slower inflation rate has not reset the price level.

The US consumer price index was still 28.6% above its December 2019 level in June 2026.2 Whether a household could absorb that increase depended on what happened to its income, savings and housing costs. Falling M2 did not take prices back to 2019.

§ 07What I take from it

First, the surge was as large as people said, and the plain-English version of the story is mostly fair. Second, money growth explained the timing better than it explained the size. Supply shocks and the way policy was run explain a lot of the rest. Third, the bill did not land evenly. It landed on the people with the least room to absorb it.

The fix I would argue for is unglamorous. Watch broad money as a signal that something is moving, not as a verdict. Keep the fiscal and monetary decisions in view together, because they came as a pair. And count the cost by who paid it, not by the average.

§References

  1. 1Federal Reserve Bank of St. Louis (FRED) — M2 Money Stock, series M2SL, seasonally adjustedfred.stlouisfed.org
  2. 2Federal Reserve Bank of St. Louis (FRED) — Consumer Price Index for All Urban Consumers, series CPIAUCSL; year-on-year rates calculated by PLEXDatafred.stlouisfed.org
  3. 3Banque de France — The increase in the money supply during the Covid crisis: analysis and implications (2 February 2022)banque-france.fr
  4. 4BIS / CGFS — Central bank asset purchases in response to the Covid-19 crisis, CGFS Papers No. 68 (March 2023)bis.org
  5. 5Federal Reserve Bank of St. Louis — Have Fed Asset Purchases Reshaped Bank Balance Sheets? Part 1 (31 January 2022)stlouisfed.org
  6. 6RBA — The Yield and Market Function Effects of the Reserve Bank of Australia’s Bond Purchases, RDP 2022-02rba.gov.au
  7. 7Bank of England — Quantitative easing: total bond purchases and their compositionbankofengland.co.uk
  8. 8Bank of Canada — Our quantitative easing operations: Looking under the hood (December 2020)bankofcanada.ca
  9. 9OECD — Employment Outlook 2023: Under pressure, labour market and wage developments (Figure 1.13 discussion)oecd.org
  10. 10OECD — A cost-of-living squeeze? Distributional implications of rising inflation, Working Paper No. 1744 (22 December 2022)oecd.org
  11. 11RBA — Renters, Rent Inflation and Renter Stress (16 March 2023)rba.gov.au
  12. 12ONS — Impact of increased cost of living on adults across Great Britain: February to May 2023ons.gov.uk
  13. 13ECB — The pandemic emergency purchase programme: an initial review (2023)ecb.europa.eu