text: What Is M2?
  M2 is the U.S. Federal Reserve's estimate of the total money supply, including all the cash people have on hand, plus all the money deposited in checking accounts, savings accounts, and other short-term saving vehicles such as certificates of deposit (CDs). Retirement account balances and time deposits above $100,000 are omitted from M2.
  The Federal Reserve tracks a separate money supply number, M1, that includes currency in people's pockets or their checking accounts and savings accounts. The money deposited in time deposits and money market funds is not counted in M1. For the Fed's purposes, this is "near money." That is, the funds cannot be used as a medium of exchange and are not instantly convertible to cash.
  - M2 is a measure of the money supply that includes cash, checking deposits, and other deposits readily convertible to cash, such as CDs.
  - M1 is an estimate of cash, checking, and savings account deposits only.
  - The weekly M2 and M1 numbers are closely monitored as indicators of the overall money supply. Too-fast growth in the numbers can be a warning sign of inflation.
  - Another money supply number, M3, includes all of the above plus large institutional cash deposits. The M3 is published quarterly.
  - Gold is not counted in M1, M2, or M3. In the modern world, gold is no longer used as a common currency.
  Measuring the money supply of an economy is a challenging proposition. Due to the complexity of the concept of "money" and the size and level of detail of an economy, there are multiple ways of measuring a money supply.
  These measures are typically classified as "M" s and fall along a spectrum from narrow to broad monetary aggregates. Typically, the "M" s range from M0 to M3, with M2 representing a fairly broad measure.
  M2 is a more comprehensive calculation than M1 because it includes assets that are highly liquid but are not intended to be routinely used as cash. Consumers and businesses don't usually use time deposits when making purchases or paying bills, but in a pinch, they could convert them to cash in short order.
  13 includes numbers on large-time deposits, institutional money market funds, and other large liquid assets. This is published on a quarterly basis.
  M1 and M2 Reporting Times
  The Federal Reserve releases M1 and M2 numbers every Thursday at 4:30 p.m. The St. Louis Fed tracks the numbers.
  Economists usually use the broader M2 number when discussing the money supply because modern economies often involve transfers between different account types.
  For example, a business may periodically transfer $10,000 from a money market account to a checking account. This transfer would increase M1, which doesn’t include money market funds, while keeping M2 stable since it contains both accounts.
  M2 is a critical factor in forecasting inflation. Inflation and current interest rates have major ramifications for the general economy, as they heavily influence job availability, consumer spending, business investment, currency strength, and trade balances.
  Changes in Money Supply
  The Federal Reserve's dual mandate is price stability and maximum sustainable employment. One of the ways it works to maintain price stability is by manipulating the M2 money supply.
  The M2 numbers provide important insight into the direction, extremity, and efficacy of central bank policy.
  M2 has consistently been growing. It was $4.7 trillion on Jan. 3, 2000, and was $20.8 trillion on March 2, 2024. The most extreme growth occurred from Feb. 2020 to June 2020 during the Coronavirus pandemic when M2 jumped from $15.3 trillion to $18 trillion. Other large increases have also coincided with economic weakness, during which expansionary monetary policy was deployed by the central bank.
  What Is the Value of M2 Now?
  The M2 was $20.8 trillion in March 2024. That's how much cash Americans had in their wallets, checking accounts, and short-term savings accounts.
  What Happens When the M2 Money Supply Increases?
  When there is more cash out there, more cash is spent. A little more can be good. A lot more can increase the risk of inflation. That's why the Federal Reserve constricts the money supply when the inflation rate rises—it is trying to slow down spending to control the inflation rate.
  Is M2 a Leading Economic Indicator?
  M2 is seen as a reliable predictor of inflation, so it might be counted among the leading economic indicators. M3 is considered by some economists to be an even better predictor of inflation. This is published quarterly rather than monthly and includes data on large liquid assets held by financial institutions.
  The Bottom Line
  The Federal Reserve isn't keeping track of how much cash you've got in your wallet, but it has a pretty good idea of how much cash we (as a population) have at any given time. The important point isn't the number but how the number is increasing or decreasing from month to month. Too much cash is seen as a warning sign of a growing threat of inflation.