M2: US: Difference between revisions

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-Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail MMFs less IRA and Keogh balances at MMFs. Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.
+M2 is a measure of the money supply that includes various components representing different forms of money that are easily accessible for spending or saving. In the United States, the components of M2 are:
+# '''M1''': This is the narrowest measure of the money supply and is included in M2. M1 includes:
+#* '''Currency in circulation''': Physical money, such as coins and paper currency, held by the public and in circulation outside the Treasury, Federal Reserve Banks, and the vaults of depository institutions.
+#* '''Demand deposits''': Non-interest-bearing accounts that are readily available for spending, like checking accounts in commercial banks and other depository institutions.
+#* '''Other checkable deposits (OCDs)''': Interest-bearing accounts on which checks can be written, including negotiable order of withdrawal (NOW) accounts, automatic transfer service (ATS) accounts, and credit union share draft accounts.
+#* '''Traveler's checks''': Traveler's checks issued by non-bank institutions are also considered part of M1.
+# '''Savings Deposits''': These are interest-bearing accounts that offer limited transaction capabilities compared to checking accounts. While funds can be withdrawn without penalty, there may be limitations on the number of withdrawals or transfers.
+# '''Small-Denomination Time Deposits''': These are certificates of deposit (CDs) with a value of less than $100,000. They are interest-bearing accounts with a fixed term to maturity. Funds are not accessible without a penalty until the maturity date is reached.
+# '''Retail Money Market Mutual Funds (MMMFs)''': These are mutual funds that invest in short-term, high-quality securities and provide liquidity and stability. Retail MMMFs are available to individual investors and allow limited check-writing capabilities.
 == Developments ==