This is blowing my mind. The more I think about this, the more perplexed I become. Unless the Fed is just making this stuff up, M1 has been virtually flat for three years; see this graph.
Now here's what's crazy: The Fed has cut the fed funds target 300 basis points since September. At the same time, everybody is in panic mode, so you would certainly think that the demand for liquid assets (such as, um, reserves on deposit with the Fed?!) would skyrocket.
How is this possible? How can the yield on loans of overnight reserves with the Fed be dropping, when people want liquid assets and M1 is flat or even falling over the last few months?!
NB, you might be tempted to say, "What are you talking about? It's a rush to safety, so the fed funds rate is falling just like other Treasury yields."
But no, the fed funds rate refers to loans made between two banks; the government isn't involved on either end. So if banks are afraid of each other because they don't trust their reported asset values, why the heck would they be content with falling yields on these loans?