Monetary Services Index: M2 (preferred)
MSIM2 • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
11,626.40
Year-over-Year Change
5.48%
Date Range
1/1/1967 - 12/1/2013
Summary
The Monetary Services Index (M2) is a comprehensive measure of the money supply that tracks the liquidity and financial assets available in the U.S. economy. It provides economists and policymakers with critical insights into monetary conditions and potential inflationary pressures.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
This index represents a sophisticated approach to measuring money supply by weighting different monetary components based on their liquidity and transaction services. Economists use it to understand the velocity and accessibility of money in the financial system, which can signal broader economic trends.
Methodology
The index is calculated by the Federal Reserve using a complex weighting methodology that considers the transaction services and liquidity characteristics of different monetary assets.
Historical Context
Central banks and monetary policymakers use this index to assess potential economic risks, inform monetary policy decisions, and gauge potential inflationary or deflationary pressures.
Key Facts
- Includes cash, checking deposits, savings deposits, and money market securities
- Provides a more nuanced view of money supply than traditional measures
- Helps predict potential economic shifts and monetary trends
FAQs
Q: What does the Monetary Services Index (M2) measure?
A: It measures the money supply by tracking various monetary assets weighted by their liquidity and transaction services. This provides a comprehensive view of financial resources in the economy.
Q: How is the M2 index different from traditional money supply measures?
A: Unlike simple money supply metrics, the M2 index uses a sophisticated weighting system that considers the functional characteristics of different monetary assets, offering a more dynamic economic indicator.
Q: How often is the Monetary Services Index updated?
A: The Federal Reserve typically updates the Monetary Services Index quarterly, providing timely insights into monetary conditions and economic liquidity.
Q: Why do policymakers care about the M2 index?
A: The index helps policymakers understand potential inflationary risks, assess economic liquidity, and make informed monetary policy decisions that can stabilize the financial system.
Q: What are the limitations of the Monetary Services Index?
A: While comprehensive, the index is a complex measure that requires sophisticated interpretation and may not capture all nuanced economic dynamics in real-time.
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Citation
U.S. Federal Reserve, Monetary Services Index: M2 (preferred) [MSIM2], retrieved from FRED.
Last Checked: 8/1/2025