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Data: Federal Reserve Bank of St. Louis; Chart: Axios Visuals

Coins and bills in circulation make up only 10% of the money supply today, Deutsche Bank Securities chief economist Torsten Sløk points out in a note to clients.

What it means: The majority of the money supply is now used by the Fed for its balance sheet and in the banking sector to purchase financial assets.

  • As such, the velocity of money has slowed dramatically, and "an increase in money supply relative to GDP is having a negative impact on inflation," Sløk says.
  • "[Y]ou can increase the Fed balance sheet and the money supply as much as you want, if the money goes into asset transactions rather than GDP transactions it will not be inflationary."

Background: "The velocity of money is the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period," according to the Fed.

  • "In other words, it is the number of times one dollar is spent to buy goods and services per unit of time."

The bottom line: Velocity looks set to slow further as the central bank ramps up its balance sheet expansion to an expected level of nearly half of U.S. GDP this year.

Go deeper: The Fed goes to war with coronavirus

Go deeper

Trump says he'll spend "whatever it takes" of his own money to win

President Trump told reporters on Tuesday that he'll spend "whatever it takes" of his own money if necessary to win in November, stressing that it's "the most important election in the history of our country."

Why it matters: The comments come after reports that Trump's campaign is having real money concerns — an unusual position for an incumbent that has worried GOP operatives. The campaign has yet to release its August fundraising, but Joe Biden and the Democrats say they raised a record-breaking $364.5 million last month.

Journalism enters dangerous new era

Illustration: Brendan Lynch/Axios

The Capitol attack on Jan. 6 resulted in at least nine physical assaults against journalists and at least five arrests, per the U.S. Press Freedom Tracker's top editor.

Why it matters: President Trump's harsh rhetoric towards the press has empowered leaders abroad and locally in the U.S. to continue to attack press that they don't like.

Ben Geman, author of Generate
3 hours ago - Politics & Policy

The beginning of the beginning for Biden's climate push

Illustration: Annelise Capossela/Axios

Joe Biden's inauguration and the days right after will bring a rat-tat-tat burst of climate policy moves, but keep this in mind amid the splashy pledges: pushing through most of his agenda will be a long, uncertain slog.

Why it matters: Biden's climate plan is far more expansive than anything contemplated under President Obama. But for all the immediate pledges, it will take years to see how far Biden gets.