Growth in the sweep-adjusted monetary base (total currency in circulation plus total reserves including depository institutions’ vault cash) has been fairly constant over the past couple of years. In 2003, however, it recorded an annual growth rate of 6.2%, slower than the 7.9% average for 1998–2002. The decline in base growth results primarily from a decrease of 2.2 percentage points (pp) in currency growth, which more than offset total reserves’ increase of 12.4 pp. Total reserves fell 2.9% from 1998 to 2002 before rising 9.5% in 2003.
Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-02, pp. 04, 02.01.2004.