The FED’s technical staff conflates micro with macro. Thus, they can’t differentiate how the system works. From the standpoint of the system, banks don’t lend deposits. Bank-held savings have a zero payments velocity.
See: BANKS DON’T LEND MONEY (youtube.com) Dr. Richard Werner
That’s the basis for Dr. Philip George’s “The Riddle of Money Finally Solved”
There’s been a “sea change”. The composition of the money stock has reversed secular stagnation, the impoundment of savings in the banks.
Link: George Garvey:
Deposit Velocity and Its Significance (stlouisfed.org)
“Obviously, velocity of total deposits, including time deposits, is considerably lower than that computed for demand deposits alone. The precise difference between the two sets of ratios would depend on the relative share of time deposits in the total as well as on the respective turnover rates of the two types of deposits.”
The ratio of transaction deposits to gated deposits has reversed by 18%. That has raised the growth of N-gDp.