Real Money Supply Is Still Contracting, And Housing Is The Next Domino

Jul. 20, 2025 7:00 AM ETSPDR® S&P 500® ETF (SPY), DIA, QQQ, IVV, VOO, IWM, SPX, SP500, NDX, DJI, DXY, , , , , , , , , , 194 Comments

Summary

  • Real money supply continues to decline, signaling tight monetary conditions.
  • Excess money from prior stimulus is likely still cushioning parts of the economy.
  • This buffer has delayed the full impact of tighter policy on growth-sensitive sectors.
  • If the contraction in real money persists, tightening effects will spread further into housing, manufacturing, and employment.
  • This idea was discussed in more depth with members of my private investing community, EPB Macro Research. Learn More »

Torn bills revealing Monetary Policy words

Tast Nawarat

Long before widespread job losses and contractions in headline GDP figures, monetary policy tightens beneath the surface. One of the earliest, most objective, and most reliable signals of monetary policy is real money supply because it is impacted by many endogenous

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This article was written by

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Eric Basmajian is the Founder of EPB Research, an economics-based research firm providing Business Cycle Research to asset managers and business owners.

Eric leads the investing group EPB Macro Research, where he applies his unique Business Cycle Framework, helping asset managers and business owners improve their portfolio strategy and long-term corporate planning. Learn More.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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