M2 YoY Growth
The rate of money supply expansion or contraction · Quotes delayed up to 5 minutesThe year-over-year growth rate of M2 money supply — the broadest commonly-cited measure of money in the U.S. economy, including cash, checking and savings deposits, money market funds, and small time deposits. Year-over-year growth is the analytically meaningful framing because the M2 level grows continuously as the economy expands; what matters is the rate of expansion and how it changes across monetary policy cycles. The gray recession bands make the relationship between money supply growth and economic downturns visually inspectable.
Analyst's Note
M2 growth has historically averaged 5–7% annually, roughly tracking nominal GDP growth. Surges above 15% are rare and historically inflationary — the 1970s saw sustained M2 growth above 10% alongside the Great Inflation. But the 2020–2022 episode was unprecedented in modern monetary history: M2 growth spiked above 25% during COVID-era fiscal and monetary expansion, then contracted negative for the first time since the Federal Reserve began tracking it — a direct consequence of quantitative tightening and the withdrawal of pandemic-era liquidity. The negative M2 growth in 2022–2023 was historically novel and its macroeconomic implications are still debated. For the gold investor, the chart tells a clear story: sustained rapid M2 expansion has historically preceded inflation regime shifts, and gold’s long-run trajectory tracks money supply growth — though with substantial lags and decade-long divergences. The current normalization of M2 growth back toward 5–7% suggests the monetary backdrop is neither acutely bullish nor bearish for gold, but the post-COVID base is dramatically higher than pre-2020.
The year-over-year growth rate of M2 money supply — the broadest commonly-cited measure of money in the U.S. economy, including cash, checking and savings deposits, money market funds, and small time deposits. Year-over-year growth is the analytically meaningful framing because the M2 level grows continuously as the economy expands; what matters is the rate of expansion and how it changes across monetary policy cycles. The gray recession bands make the relationship between money supply growth and economic downturns visually inspectable.
Analyst's Note
M2 growth has historically averaged 5–7% annually, roughly tracking nominal GDP growth. Surges above 15% are rare and historically inflationary — the 1970s saw sustained M2 growth above 10% alongside the Great Inflation. But the 2020–2022 episode was unprecedented in modern monetary history: M2 growth spiked above 25% during COVID-era fiscal and monetary expansion, then contracted negative for the first time since the Federal Reserve began tracking it — a direct consequence of quantitative tightening and the withdrawal of pandemic-era liquidity. The negative M2 growth in 2022–2023 was historically novel and its macroeconomic implications are still debated. For the gold investor, the chart tells a clear story: sustained rapid M2 expansion has historically preceded inflation regime shifts, and gold’s long-run trajectory tracks money supply growth — though with substantial lags and decade-long divergences. The current normalization of M2 growth back toward 5–7% suggests the monetary backdrop is neither acutely bullish nor bearish for gold, but the post-COVID base is dramatically higher than pre-2020.
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