Fed Pours More Funds Into Financial System

A gauge of the U.S. money supply rose a record $164.5 billion during the week ended Sept. 17, the Federal Reserve reported, as the central bank pumped cash into the financial system after the terrorist attacks in the U.S.

The increase in the M2 money supply followed a rise of $15.6 billion a week earlier. That left M2 growing at an annual rate of 9.4% for the last 52 weeks, above the target of 5% the Fed previously set for maximum growth. The Fed no longer sets a formal target.

The record increase in the M2 supply was concentrated in demand deposits and, to a lesser extent, savings deposits, the Fed said. The increase is expected to be temporary, it added.