M2 vs. inflation

The federal government's $2.2 trillion stimulus package* has raised the question of whether we'll face excessive inflation over the next months and years.

One preliminary data point: from the start of 1983 through March 2020, there has been a slight negative correlation (-0.16) between year-over-year changes in the broad money supply (M2) and inflation as measured by the consumer price index (CPI). The following charts all show the same M2 and CPI data -- by levels, changes, and a scatter plot of changes.

*Included in the bill:

• Large business and local government loans: $504B
• Small business assistance: 377
• One-time checks to individuals: 290
• Business tax cuts: 280
• Expanded unemployment benefits: 260
• Health spending: 180
• Aid to state and local governments: 175
• Disaster assistance: 45
• Food stamps and safety net: 42
• Other spending: 35
• Education spending: 32
• Personal tax cuts: 10

https://www.washingtonpost.com/business/2020/03/26/senate-stimulus-bill-coronavirus-2-trillion-list-what-is-in-it/

PS: For a more thorough check these should be lagged (e.g., following the theory that inflation might increase a period or two after a money supply increase)