US M2 Money Supply (M2SL)
US M2 money supply in USD billions from 2000 onwards. M2 is the broadest of the standard US monetary aggregates and the single most-watched proxy for global USD liquidity. Bitcoin and US equities both track M2 expansion and contraction phases more closely than any other macro variable. The 2020-2022 COVID-era M2 surge (40 percent in 24 months) preceded the 2021 risk-asset top; the 2022-2023 M2 contraction (the first since 1949) coincided with the 2022 bear market. Live FRED data with recession shading.
Chart
Monthly US M2 money supply (M2SL) in USD billions on a log scale. Grey-shaded bars mark NBER-dated recessions. Hover for the exact monthly value. Log scale because M2 has grown roughly 5x since 2000 and a linear chart would flatten the early data.
What is M2?
M2 is one of the standard monetary aggregates the Federal Reserve tracks to measure the total stock of money in the US economy. Going from narrowest to broadest:
- M0 (monetary base). Physical currency in circulation plus bank reserves held at the Fed. The narrowest definition.
- M1. M0 plus demand deposits, traveller's cheques, and other checkable deposits. The most-liquid public money supply.
- M2. M1 plus savings deposits, money-market deposit accounts, retail money-market funds, and small-denomination time deposits under $100,000. The standard "broad money" measure.
- M3. M2 plus institutional money funds and large time deposits. The Fed stopped publishing M3 in 2006.
M2 captures most of what the public and non-financial businesses can move into the spending stream without much friction. It is published monthly in the Fed's H.6 statistical release; FRED carries the seasonally adjusted monthly series as M2SL.
Why AU traders watch US M2
- Global liquidity proxy. US M2 alone accounts for roughly 25 percent of global broad money. The directional signal in US M2 closely tracks "global M2" (US + China + Eurozone + Japan), which is what crypto and risk-asset traders ultimately care about. When US M2 expands, global M2 typically expands; when US M2 stagnates or contracts, the global picture usually follows.
- AUD/USD pressure. Sustained M2 expansion (rate of growth above nominal GDP growth) is mildly USD-bearish at the margin, supportive of AUD/USD via the USD-weakness channel. The 2021 AUD/USD strength coincided with peak M2 growth; the 2022 AUD/USD weakness coincided with the M2 contraction.
- BTC + ASX 200 regime. M2 growth above roughly 7 percent annualised has historically coincided with strong returns in both BTC AUD and the ASX 200. M2 below ~3 percent annualised, or contracting, has coincided with drawdowns in both. Use M2 trajectory as a regime-defining variable for position sizing.
M2 vs Bitcoin correlation
| M2 phase | Dates | M2 growth | BTC AUD outcome |
|---|---|---|---|
| Steady expansion | 2014-2019 | ~6-7% YoY avg | 2017 bull, 2018 bear, range-bound 2019 |
| COVID surge | Mar 2020 - Mar 2022 | +41% peak (40% YoY in Feb 2021) | Bull market, 10x AUD price |
| Contraction | Apr 2022 - Mar 2024 | -4.4% YoY trough | Bear market 2022, slow recovery 2023 |
| Resumption | Mid-2024 onwards | +3-5% YoY | Cycle 2024-2026 (current) |
The lag from M2 inflection to BTC inflection is roughly 10-12 weeks on average, though the relationship is noisy on shorter timeframes. M2 should be used as a regime variable on a multi-month horizon, not a trade-timing signal.
Methodology
- Source. FRED series ID M2SL (seasonally adjusted monthly).
- Endpoint.
https://fred.stlouisfed.org/graph/fredgraph.csv?id=M2SL(public CSV, no API key required). - Recession shading. NBER-dated US recessions: 2001 dotcom, 2007-09 GFC, 2020 COVID.
- Log scale. M2 has grown roughly 5x since January 2000 and a linear chart compresses the early decades. The log scale shows constant-growth-rate periods as straight lines.
- Static-first. If FRED is unreachable on a given build, the existing snapshot is preserved.
Related tools
- M2 YoY % - the growth-rate view; spots inflection points faster than the level view.
- Fed Funds Rate - the policy rate that drives M2 expansion / contraction.
- Fed Balance Sheet (WALCL) - the quantity side of Fed liquidity provision.
- CPI Inflation - the consumer-price side of M2 transmission.
- Bitcoin Log Regression (AUD) - the BTC cycle structure M2 helps explain.
Frequently asked questions
M2 (FRED series M2SL) measures the total stock of money in the US economy. It includes M1 (currency in circulation plus demand and checkable deposits) plus savings deposits, retail money-market funds, and small-denomination time deposits. M2 captures most of the money the US public and businesses can readily spend or move into the spending stream. The Federal Reserve publishes monthly seasonally adjusted M2 figures via the H.6 statistical release.
M2 is the most direct measure of total USD liquidity available to chase financial assets. Bitcoin shows the strongest correlation to global M2 (US + China + Eurozone + Japan combined) at a roughly 10-12 week lag - more than to the S&P 500, gold, or the dollar index in isolation. The 2020-2022 M2 surge from $15.4T to $21.7T (a 41 percent expansion in 24 months) provided the liquidity backdrop for the 2021 BTC cycle peak. The 2022-2023 M2 contraction (first nominal decline since 1949) coincided with the 2022 BTC bear market low. Most macro-aware crypto investors use M2 trajectory as a regime-defining variable.
Three channels. (1) AUD/USD: M2 expansion is generally USD-bearish at the margin, supportive of AUD/USD via the USD-weakness channel. (2) Risk-asset positioning: M2 growth above ~7 percent annualised has historically coincided with strong BTC and ASX 200 returns; M2 contraction has coincided with drawdowns in both. (3) Capital flows into AU: Australian-listed crypto ETFs and ASX growth stocks tend to attract foreign inflows when US M2 is expanding and global risk appetite is elevated.
Before 2022, the last sustained nominal M2 contraction in the US was 1948-1949. The 2022-2023 contraction (peaking at about minus 4.4 percent year-over-year in April 2023) was unprecedented in the post-WWII era and triggered widespread macro commentary that the Fed was running policy too tight. The contraction reversed in late 2023 as the Fed paused hiking and bank deposit flight stabilised. As of 2026 M2 has resumed expansion at roughly 4-5 percent annualised.
M2 is the stock of money. M2V is the velocity of money: GDP divided by M2, measuring how many times each dollar in M2 changes hands in a year. M2 expansion with falling M2V (the 2020-2022 backdrop) generates asset-price inflation but limited goods-price inflation initially. M2 contraction or stagnation with rising velocity (the late-2022 backdrop) generates the opposite: goods-price disinflation but asset-price pressure. The 'inflation regime' question is really an M2 stock vs flow vs velocity question rather than a single-variable story.
Yes. FRED series M2SL is the seasonally adjusted monthly M2 stock as published in the Fed's H.6 statistical release. Weekly non-seasonally-adjusted figures are available as WM2NS. The chart on this page uses M2SL for the cleaner monthly seasonally adjusted view, which is the version most macro research and most central-bank policy commentary references.
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