Money Indicator
M2 Money Supply (Year-over-Year Change)
Updated 2026-03-25 · Monthly · Source: Federal Reserve · Next release: 2026-04-22
Historical Trend
| Date | Value |
|---|---|
| 2026-03 | 3.9% |
| 2026-02 | 3.7% |
| 2026-01 | 3.8% |
| 2025-12 | 3.7% |
| 2025-11 | 3.7% |
| 2025-10 | 3.5% |
| 2025-09 | 2.6% |
| 2025-08 | 1.7% |
| 2025-07 | 2.0% |
What This Means for Business
M2 growth has recovered to 3.9% year-over-year after an unprecedented contraction in 2023 (the first in modern history). The normalization of money supply growth supports economic activity without being excessively inflationary. For executives, moderate M2 growth (3-5%) is consistent with a healthy economy — it means enough liquidity to support business activity without fueling the kind of excess that drove 2021-2022 inflation.
About M2 Money Supply
M2 is a measure of the money supply that includes cash, checking deposits, savings deposits, money market funds, and small time deposits. Year-over-year changes in M2 are a leading indicator of inflation and economic activity.
Methodology
The Federal Reserve reports M2 weekly and monthly. Components: M1 (currency in circulation + demand deposits + other checkable deposits) plus savings deposits, small time deposits under $100,000, and retail money market funds. M2 is the most commonly cited money supply measure because it captures both transaction and savings balances.
Related Indicators
Frequently Asked Questions
How does money supply affect inflation?
The monetarist theory holds that inflation is 'always and everywhere a monetary phenomenon' — too much money chasing too few goods. The 40% M2 expansion during 2020-2021 was a major contributor to the subsequent inflation surge. However, the relationship is not mechanical: money supply growth must exceed real economic growth to be inflationary. The velocity of money (how quickly money changes hands) also matters.