M2
MacroDefinition
Money supply measure including M1 plus less-liquid forms: small-denomination time deposits, retail money market funds. Around $21T as of 2024. The most-watched headline money supply number.
M2 growth above 10% YoY has historically preceded inflation waves with a 12-18 month lag (1971-72, 2020-21). M2 contraction is rare and usually signals economic distress.
M2 growth above 10% YoY has historically preceded inflation waves with a 12-18 month lag (1971-72, 2020-21). M2 contraction is rare and usually signals economic distress.
Example
M2 grew ~25% YoY in early 2021 — fastest in modern history. Inflation peaked at 9% YoY in mid-2022. Mechanism: COVID stimulus + QE flooded the system with liquidity that took ~18 months to translate to prices.
Related tool
Open the economic tool on Arsenal.finance →