Report published September 24, 2026

Putting Money Back Into Monetary Policy: TS Lombard on the Monetarist Revival

TS Lombard · September 24, 2026

Following the success of monetary aggregates in predicting post-COVID inflation, incoming Fed leadership and monetarist commentators are pushing to restore money-supply analysis to central banking. However, TS Lombard argues this revival is a fade that will amount to lip service without shifting interest-rate paths or asset prices.

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Finvaulta summarizes TS Lombard's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Monetarism has regained attention because money-supply metrics accurately flagged the post-COVID inflation surge, prompting calls by figures like Kevin Warsh to reintroduce monetary aggregates into Fed policy.
2.Tracking money supply remains unreliable due to erratic velocity shifts and Goodhart's law; notably, monetarists incorrectly predicted severe recessions and deflation when money supply contracted in 2022–2023.
3.Central banks will likely pay lip service to money supply data without altering medium-term interest rate paths or materially affecting asset prices.

1. Prices Versus Quantities
2. The Failed Revolution
3. The Monetarists' Revenge
Bottom line

Report data

Chart 1: Just when it looked like monetarism was dead

Metric	Estimate	Context
Money supply drop during 2022–2023 tightening	largest annual decline since 1922	Tim Congdon argued that rapid contraction in broad money across Fed, ECB, and BoE would plunge the global economy into deflation.

Source: TS Lombard / Tim Congdon. This is a dated model snapshot, not a live forecast.