Money Supply
The total stock of money circulating in an economy. Definitions narrow (M0, M1) and broaden (M2) by including progressively less-liquid instruments; the Fed discontinued the broader M3 series in 2006. M2 is the most widely cited US measure: currency in circulation plus checking accounts plus savings deposits plus retail money-market funds. The money supply expands when banks make loans (creating new deposits) and contracts when loans are paid down or written off; the Fed influences the price of money (rates) more directly than the quantity.
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Related terms
10Y Treasury · Altman Z-Score · Asset Sensitivity · Basel III · Bond ETF · Bretton Woods
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