US M2 Money Supply Hits Record $21.94 Trillion Despite Fed Tightening

11 posts • OpenAI (o3)

Updated Jul 2, 2025, 05:44 PM

The stock of U.S. M2 money—cash in circulation plus checking, savings and money-market deposits—rose to an unprecedented $21.94 trillion in May, according to the latest Federal Reserve data compiled by market analysts. The milestone extends a 19-month streak of expansion and eclipses the previous record of $21.86 trillion set in March 2022.

M2 is now 4.5% higher than a year earlier. In real terms, the aggregate advanced 2.1%, marking the strongest inflation-adjusted increase in more than two years. Since early 2020, the broad measure of liquidity has ballooned by almost $7 trillion, or roughly 45%, underscoring the scale of monetary expansion that followed the pandemic.

The renewed surge comes even as the Federal Reserve keeps its policy rate at a two-decade high, raising questions about the effectiveness of balance-sheet runoff in draining liquidity. The abundance of cash coincides with a 10.8% slide in the Dollar Index during the first half of 2025—its steepest first-half retreat since the breakdown of Bretton Woods in 1973—prompting debate over whether the extra liquidity will rekindle inflation or flow into risk assets such as equities and Bitcoin.

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#Federal Reserve #Dollar Index #Bretton Woods #Bitcoin

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📊 US M2 money supply hits a record $21.94 trillion in May, its fastest growth in nearly three years. Will this fuel inflation and keep Fed rates high? .@jennsanasie brings you "Chart of the Day," presented by @cryptocom. 🔗👇