“Perhaps the tightening on one part of the system is intended to hedge what they are doing to influence the another part of the system via rates ?”
Could very well be.
As far as M2 goes, could also be that a lot of companies are cashing in their LOCs and putting the cash into money market funds for future liquidity needs while they still can. Suggest that you read Mish Shedlock’s site for theories on whether the Fed is really “printing” or not.
