• M2 Money Supply moves ~6 days before US CPI

  Watch M2 Money Supply for an early read on US CPI.

The strong correlation between M2SL (a measure of the money supply) and CPIAUCSL (the consumer price index) suggests that increases in the money supply are closely associated with rising consumer prices, indicating inflationary pressures. With M2SL leading CPIAUCSL by six periods, this timing is crucial for investors and policymakers, as it signals that changes in the money supply can precede shifts in inflation, allowing for proactive adjustments. However, while the correlation is robust, it’s important to consider other factors that may influence inflation, such as supply chain issues and fiscal policy, which can affect the relationship.

See how correlation changes when one series is offset in time. A taller bar at a non-zero shift means the two move together better when one leads the other — that's a potential lead/lag signal.

The strongest positive and inverse pairs we’ve saved for each side of this comparison — good jumping-off points if this result raised a question.