What is the M2 money supply today?
US M2 Money Supply is at a current level of 20.93T, up from 20.76T last month and down from 21.43T one year ago.
United States Money Supply M2 was reported at 20,865.200 USD bn in Dec 2023 See the table below for more data.
M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs.
M2 is M1 plus money held in short-term time deposits such as certificates of deposit (CDs) and in money market funds. Economists closely track the money supply. And the U.S. money supply is indeed shrinking quite dramatically. The year-over-year change in M2 money supply is now negative for the first time in decades.
| Related | Last | Unit |
|---|---|---|
| Money Supply M1 | 18101.40 | USD Billion |
| Money Supply M0 | 5827200.00 | USD Million |
| Money Supply M2 | 20865.20 | USD Billion |
| Banks Balance Sheet | 23220.20 | USD Billion |
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.
The Federal Reserve was created to manage the money supply of the nation and to prevent economic injuries to the citizens of the U.S. The Fed has powerful tools to affect the supply of money. Read on to learn how it manages the nation's money supply.
A credit card is not a part of the M1 or M2 money supply, and as a matter of fact, is not part of the money supply at all. This is because money supply is the aggregate value of monetary assets, and does not include liabilities.
On the other hand, a decrease in M2 can indicate a tightening of credit and reduced economic activity. It becomes concerning when the money supply growth rate turns negative. A negative growth means that the amount of money circulating in the economy is shrinking.
To reduce the supply of M2 in an economy, a central bank might issue bonds or other government-backed securities which lenders can buy; in doing so, they loan the government money. This means that a central bank's money reserves increase at the expense of the money available in the economy.
What does M2 tell us?
M2 is a measure of the U.S. money stock that includes M1 (currency and coins held by the non-bank public, checkable deposits, and travelers' checks) plus savings deposits (including money market deposit accounts), small time deposits under $100,000, and shares in retail money market mutual funds.
Rate increases put pressure on M2. Higher rates mean consumers pay more interest on loans, depleting cash reserves. Plus, higher rates push depositors toward nondeposit investments, which also affects M2. Ultimately, falling money reserves will crimp demand and inflation.
The primary way the Fed controls the monetary base is through open market operations: buying or selling securities. To increase the monetary base, the Fed buys securities from any party and pays with a check.
As of June 2023, the value of M2 money supply in the United States amounted to roughly 20.9 trillion U.S. dollars.
The M1 money supply includes all physical currency, traveler's checks, demand deposits, and other checkable deposits (e.g. checking accounts).
Overall, as shown in table 1, the size of the Federal Reserve's balance sheet decreased roughly $90 billion from about $8.8 trillion on September 28, 2022, to about $8.7 trillion as of March 29, 2023.
Several asset classes perform well in inflationary environments. Tangible assets, like real estate and commodities, have historically been seen as inflation hedges. Some specialized securities can maintain a portfolio's buying power, including certain sector stocks, inflation-indexed bonds, and securitized debt.
M1 is an estimate of money circulating within the economy, plus checking account deposits and more recently savings accounts. M2 includes M1 plus money in money market accounts and mutual funds. M2 is often viewed as an indicator of future inflation and economic growth potential.
Money Supply M2 in the United States increased to 20865.20 USD Billion in December from 20767.50 USD Billion in November of 2023.
Answer and Explanation: The Federal Reserve backs money supply in the United States. The Federal Reserve has the responsibility of managing and controlling the money supply and individual's faith in the government is the most important source that backs the money supply and its acceptability.
Why is the US money supply shrinking?
The U.S. money supply is shrinking for the first time since 1949, as savings deposits decline and the Federal Reserve shrinks its $8 trillion balance sheet.
Credit cards are part of the: Option d. Do not affect the money supply. Credit cards are the cards issued by the banking institutions. Credit cards facilitate the cardholder to withdraw money from his deposit account with the bank.
Your $5,000 line of credit on your Bank of America card. The money on credit includes debt. They are neither part of M1 or M2.
Gold isn't any form of money in today's world. It has a value, but cannot be used as a currency, or a substitute for money. This is because it cannot be considered to be similar to notes, coins and deposits. Thus, gold does not fall in any of the money categories - it is neither M1 and M2, nor M3.
For example, M2 includes savings deposits in banks, which are bank accounts on which you cannot write a check directly, but from which you can easily withdraw the money at an automatic teller machine or bank.
