Fed Chair Powell Got a Lesson in Economics from Senator Lummis: U.S. Households Are Sitting on the Highest Level of Bank Deposits in the Past 68 Years

Courtesy of Pam Martens

By Pam Martens and Russ Martens

Senator Cynthia Lummis (R-WY) is the first woman from Wyoming to ever serve as a United States Senator and she has a coveted spot on the Senate Banking Committee. Lummis holds three degrees from the University of Wyoming — in Animal Science, Biology and Law. Today, during a Senate Banking Committee hearing with Fed Chair Jerome Powell, Lummis proved she knows a thing or two about economics and the money supply.

Lummis came armed with the above oversized chart for her colleagues and Powell to ponder. Lummis told Powell the following:

“M2 data shows that deposits and close substitutes held by households have generally averaged 51 percent of GDP from 1952 to 2021. But then data from the end of Quarter 1 of 2021 shows that households are sitting on deposits and close substitutes of approximately 79 percent of GDP today. So that’s roughly 28 percent [increase] or trillions of dollars above the historic average.

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