What is the current M1 money supply?

US M1 Money Supply is at a current level of 20.69T, up from 20.60T last month and up from 18.37T one year ago….Basic Info.

Region United States
Source Federal Reserve

Is the M2 money supply considered as money?

M2 is a measure of the money supply that includes cash, checking deposits, and easily-convertible near money. M2 is a broader measure of the money supply than M1, which just includes cash and checking deposits.

How much US currency is in circulation 2021?

US$2.10 trillion
As of February 10, 2021, currency in circulation amounted to US$2.10 trillion, $2.05 trillion of which is in Federal Reserve Notes (the remaining $50 billion is in the form of coins and older-style United States Notes).

What backs the US money supply?

The Federal Reserve, as America’s central bank, is responsible for controlling the money supply of the U.S. dollar. The Fed creates money through open market operations, i.e. purchasing securities in the market using new money, or by creating bank reserves issued to commercial banks.

Why did M1 increase in 2021?

Of the $14 trillion increase in M1, $11.2 trillion (80%) came from an accounting rule change that shifted money from savings accounts to checking accounts. That’s why M2, which is more comprehensive than M1, has increased by $11 trillion less than M1 over the last year.

Are bank reserves M1 or M2?

M1: Bank reserves are not included in M1. M2: Represents M1 and “close substitutes” for M1. M2 is a broader classification of money than M1. M2 is a key economic indicator used to forecast inflation.

What is M1 M2 M3 and M4?

M1 and M2 are known as narrow money. M3 and M4 are known as broad money. These gradations are in decreasing order of liquidity. M1 is most liquid and easiest for transactions whereas M4 is least liquid of all. M3 is the most commonly used measure of money supply.

What happens when money supply decreases?

Decreasing the money supply also increases the interest rate, which discourages lending and investment. The higher interest rate also promotes saving, which further discourages private consumption. The decrease in consumption and investment leads to a decrease in growth in aggregate demand.