October 8, 2019
Corporate cash holdings rose $134 billion in the second quarter to $2.80 trillion (above). At 10.5% they are significantly higher than their long-run average of 9.8% of non-financial assets (below). The problem with this series is that every time the Fed adds data for a new quarter, the history of the series going back for years will also change, and the relationship between corporate cash and financial assets will get revised. It is hard to make any meaningful analysis when a series is subject to sizable revisions.