M2 Money Supply: Overview and What's Included

By Kristi Waterworth – Updated Oct 3, 2025 at 9:48 PM | Fact-checked by Frank Bass

Key Points

M2 money supply includes liquid and near-liquid funds, essential for short-term economic forecasts.
Tracking M2 helps the Federal Reserve maintain price stability by adjusting monetary flow.
Investors use M2 trends to gauge inflation and adjust their investment strategies accordingly.

The Federal Reserve has several ways to look at the money supply by dividing it into various categories, including the M2 money supply. This is a broader category than M0 or M1 and tells a different story about the economy. Read on to learn about this type of money and why we follow it.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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