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M2 Money Supply — Money Supply Growth Chart

M2 is the broad measure of money in the US economy. When the Fed expands it, asset prices rise. When it contracts, markets lose their main source of demand. This chart shows which of the two is happening now.

US Money Supply (M2)

Total money supply in circulation including cash, checking deposits, and easily convertible near money. Rapid growth can indicate inflationary pressure.

Thresholds (3-month % change): Negative >15% • Warning ≥10% • Positive <10%

POSITIVE

Today's 3-month change sits at the 71.1st percentile of 808 months since 1959.

Current Value
$23.2T
3-month Change
+461.3
3-month % Change
+2.03%

Why this can crash the market

Asset prices depend on how much money chases a fixed set of things to own. When the Fed expands M2, the new money goes into stocks, housing and anything with a return. When M2 shrinks, that demand is withdrawn from everything at once. The 2022-2023 contraction, the first since the 1930s, ran alongside a bear market in stocks and bonds together.

Historical Data

The last three years • Source: FRED M2SL, monthly

M2 Money Supply
23,218.00▲ 102.80 (0.44%) vs prevJul 1, 2026

What Is M2 Money Supply?

M2 is the Federal Reserve's broadest commonly-used measure of money in the economy. It captures the total amount of money available for spending and investing.

M2 Components

  • Physical currency in circulation
  • Checking and savings deposits
  • Money market fund shares
  • Small-denomination time deposits

Growth Rate Signals

  • 5-8% growth: Goldilocks zone for markets
  • Above 10%: Inflationary risk building
  • Above 20%: Aggressive stimulus mode
  • Negative growth: Deflationary contraction risk

Money Supply and Asset Prices

M2 growth and stock returns have moved together in the past. When money supply grows, the extra money looks for returns in stocks and property. When it shrinks, the same assets face selling.

Expanding M2 (Bullish)

More money chasing the same assets pushes prices higher. The 40% M2 expansion in 2020-2021 fueled one of the fastest equity rallies in history.

Contracting M2 (Bearish)

In 2022-2023, M2 contracted for the first time since the 1930s during quantitative tightening. This coincided with significant equity and bond market drawdowns.

The Federal Reserve Connection

The Fed changes M2 in two ways. Quantitative easing buys bonds and adds money. Quantitative tightening lets bonds mature and drains it. Interest rate decisions also change how much money banks create through lending.

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Methodology

Every formula, source series and threshold behind these numbers

Money supply data sourced from the Federal Reserve. For educational purposes only. Not investment advice.