Money Supply (M2): 67 Years of Fed Data
The money supply is the total of cash and bank-type balances that people and businesses can spend or quickly turn into spending. The Federal Reserve's main measure, M2, adds savings, small time deposits and retail money market funds to cash and checking; it was $23,342.8 billion in Aug 2026.
Money supply sounds like one number, but the Federal Reserve publishes several, and the one most people mean is M2. Each month the Fed’s H.6 release adds up the cash, checking, savings and similar balances held by the public, and the total has been published in the same series since January 1959.
This page reads that series directly: how M2 is built, how fast it has grown, the one stretch when it shrank, and the definition change that makes M1 charts misleading.
How it works
M1 is money ready to spend. Per the Fed’s own definition, M1 is currency held by the public, demand deposits at commercial banks, and other liquid deposits, which since May 2020 include savings deposits and money market deposit accounts.
M2 is M1 plus near-money. The Fed defines M2 as M1 plus small-denomination time deposits (under $100,000) and balances in retail money market funds, minus individual retirement account (IRA) and Keogh balances held at banks and money funds.
What is not in it. Stocks, bonds, institutional money market funds, large time deposits and retirement balances are all outside M2. So are the reserves banks hold at the Fed, which are counted on the Fed’s balance sheet instead.
How it grows. Money in M2 is mostly bank deposits, and deposits are created when banks lend and when the government or the Fed pays money into the private sector. They shrink when loans are repaid, when people move money into assets outside M2, and when the Fed or Treasury draws money out. The central banks page covers the tools the Fed uses to influence this.
A worked example
Building M2 for Aug 2026 from the H.6 components, seasonally adjusted, in billions:
- Currency $2,389.7 + demand deposits $7,128.0 + other liquid deposits $10,473.5 = M1 of $19,991.1 (the parts are rounded, so they add to $19,991.2).
- M1 $19,991.1 + small time deposits $1,505.6 + retail money market funds $3,073.9 = $24,570.6.
- Minus IRA and Keogh balances of $1,227.9 (not seasonally adjusted, and a Fed estimate for the latest months) = $23,342.7, against the published $23,342.8.
Year-over-year growth. M2 was $22,092.6 billion in Aug 2025. $23,342.8 / $22,092.6 - 1 = 5.66%.
M1 is 85.6% of M2 today. In Apr 2020, before savings deposits were moved into M1, it was 28.5%.
The original data
812 months of M2, Jan 1959 to Aug 2026, from the Fed’s own H.6 download. Year-over-year growth can be measured from Jan 1960 on. Averaged over every month from 1960 to 2019, it was 6.80%.
The pandemic surge was the fastest in the series. M2 was $15,492.8 billion in Feb 2020. A year later it was 26.78% higher, the largest year-over-year rise on record here. It peaked at $21,788.1 billion in Mar 2022, 40.63% above Feb 2020.
Then it shrank on the year, which the series had never shown before. Year-over-year growth was negative in 15 months, from Dec 2022 to Feb 2024, with the deepest reading at -4.64% in Apr 2023. No month from 1960 to Nov 2022 had shown a year-over-year fall. M2 bottomed at $20,737.4 billion in Oct 2023, 4.82% below its peak, and first passed the Mar 2022 level again in May 2025, at $21,836.1 billion.
Growth of 10% or more has come in clusters. Of 104 months with M2 up at least 10% on the year, 59 were in the 1970s, 15 in the 1980s, 4 in the 2000s, 2 in the 2010s and 24 in the 2020s.
The full monthly series, with M1 and the year-over-year rates beside consumer-price inflation, is in the M2 data file.
Money supply and prices
They rose together after 2020, but not in step. From Feb 2020 to the M2 peak in Mar 2022, M2 rose 40.63% and the consumer price index rose 10.96%. Consumer-price inflation peaked later, at 8.98% year over year in Jun 2022. Over the whole span from Feb 2020 to Aug 2026, M2 was up 50.67% and consumer prices 28.88%.
What those figures show and do not show. They show that a large rise in M2 came before the fastest price rises since Nov 1981, when the year-over-year rate was last higher than Jun 2022’s, and that prices did not rise by as much as M2. They cannot show how much of the inflation the money caused, because supply shortages, energy prices and spending patterns changed at the same time. Treat the pairing as a fact about one period, not a rule.
Where it sits with the other measures. Stagflation looks at slow growth and high inflation together; M2 is one input economists watch alongside both.
When it fails
M1 fails across May 2020. On 24 Apr 2020 the Fed removed the six-a-month transfer limit on savings deposits, and from the May 2020 data the H.6 release counts savings deposits inside M1, with the history revised back to that month. M1 went from $4,856.4 billion in Apr 2020 to $16,312.5 billion in May 2020, 3.36 times higher, while M2, which already held those deposits, rose 5.09%. A chart of M1 across that date shows a relabeling, not a flood of new money.
It fails as a timing tool. Year-over-year M2 growth is known only after the month ends and can be revised later. After 2020, year-over-year consumer-price inflation peaked in Jun 2022, 16 months after M2 growth peaked in Feb 2021. That is one episode, so it says little about how long the gap would be next time.
It misses money that behaves like money. Institutional money market funds and large deposits sit outside M2, and balances move in and out as interest rates change. A fall in M2 can mean savers moved cash into Treasury bills rather than that spending power vanished.
And seasonal adjustment is an estimate. The Fed seasonally adjusts each part separately, then subtracts the unadjusted IRA and Keogh balances, so a single month’s change can shift when the adjustment is revised.
Related
Inflation is the price measure most often set beside M2, and central banks covers the institution that publishes it and sets policy. Stagflation puts inflation next to slow growth, and interest rates move money between M2 and the assets outside it.
Check which measure and which adjustment a money-supply chart uses before reading anything into it. M1 before and after May 2020 are two different things, and a seasonally adjusted M2 can differ from the unadjusted one by tens of billions in any month.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.