Measuring money with M2

The takeaway

The Fed’s monetary aggregates measure the amount of money in the economy. One such measure is M2, which includes liquid assets such as checking accounts but excludes non-liquid assets such as individual retirement accounts.

What is M2?

M2 measures how much money is readily available in the economy. That is, funds easily converted to cash. As of June 2026, M2 amounted to $23 trillion.

Our FRED graph above shows the components of M2:

• M1 in blue, which itself includes cash and checking and savings accounts
• Small-denomination time deposits in green
• Retail money market funds in brown
• The total value of individual retirement account (IRA) and Keogh retirement account balances, in purple, is subtracted from this measure. These funds carry large penalties for preretirement withdrawals and, therefore, aren’t considered liquid.

Recent changes

Surveys by the Board of Governors of the Federal Reserve System in recent years show that a growing share of IRA and Keogh balances held at depository institutions now sit in savings and checking-type accounts, rather than in small-denomination time deposits or in retail money market funds.

Starting July 28, 2026, these IRA and Keogh balances have been subtracted from the total value of M2, rather than from the individual values of the small-denomination time deposits and retail money market funds. This had almost no impact on the total value of M2, but it did result in the recalculation of those two components.

Graph these changes

ALFRED stores vintages of FRED data and allows you to see the historical values of both small-denomination time deposits and retail money market funds before and after this reporting changes. Both data series now show higher values.

More details

M2 data come from the Fed’s H.6 statistical release, Money Stock Measures, published weekly by the Federal Reserve Board. Keep up with their announcements here.

What about that orange area in the graph? It shows saving deposits. As of April 2020, this component was reclassified from a category of M2 into M1, so our graph doesn’t show the value past that date. Learn more about this regulatory change here.

How this graph was created: Search FRED for “M1.” Click the “Edit Graph” button and select the “Add Line” tab to search for “Small-Denomination Time Deposits: Total.” Don’t forget to click “Add data series.” Repeat this last step to search for and add the other two series: “Retail Money Market Funds” and “IRA and Keogh Accounts: Total.” Next, use the “Select Area” dropdown menu to customize “Line 4 – IRA and Keogh Accounts” by typing the formula -a and clicking on “Apply Formula.” Last, select the “Format” panel to pick “Graph type: Area” and “Stacking: Normal.”

Suggested by Maria Arias and Diego Mendez-Carbajo.