Transcript PowerPoint slides

DataPost
The Money Supply
Measuring M1 & M2
Date last updated: May 9, 2016
Federal Reserve Bank of San Francisco
Economic Education & Outreach
Money Supply – Did You Know?
M1 and M2
($trillions, non-seasonally adjusted)
Used
• By households and businesses
• To make payments and to be held as
short-term investments
Source: Federal Reserve Board
$12
$10
M2-M1
$8.59
M1
$8
• M1 = coin and currency in circulation,
plus checking accounts
• M2 = M1 plus short-term liquid
Components assets
$6
$3.22
$4
$2
$4.77
$1.54
$0
Context
• The Fed uses M1 and M2 as a
standardized way of defining money
in the economy
1980
1990
2000
2010
As a share of the total values
shown above, M1 dropped
from 26% in 1980 to 20% in
2010.1
1. See PowerPoint file for technical note.
DataPost
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Money Supply – Components
March 2016
M2
•
•
•
•
Savings Deposits
Time Deposits
Certain CDs
Money Market
Deposit Accounts
• Money Market
Mutual Funds
• Includes M1
($trillions, seasonally adjusted)
$14
$12
$10
Source: Federal Reserve Board
M2-M1
M1
$8
$9.42
$6
M1
•
•
•
•
Coin
Currency
Demand Deposits
Travelers Checks
$4
$2
$3.15
$3.15
M1
M2
$0
DataPost
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FRBSF Economic Education & Outreach
M2 in Detail
March 2016 ($billions, seasonally adjusted)
Savings Deposits,
$8,312
Small-Denomination
Time Deposits, $395
Retail Money
Market Funds, $715
Currency and Coins,
$1,359
Demand Deposits,
$1,267
M1 components of M2
Other Checkable
Deposits, $519
Traveler's Checks, $2
$0
$1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000
Source: Federal Reserve Board 5/5/16 data release
Note: Components may not add to totals due to rounding
DataPost
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Trends — M1 and M2
Jan. 1980 to Mar. 2016 ($trillions, seasonally adjusted)
$14
M2-M1
M1
$12
$10
$8
M2
$6
$4
$2
M1
$0
1980
1985
1990
1995
2000
2005
2010
2015
Source: Federal Reserve Board 5/5/16 data release
DataPost
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FRBSF Economic Education & Outreach
What Do You Think?
1. How much cash (coin + currency) do you
currently have in your pocket, wallet, or purse? Is
this cash part of M1 or M2?
2. Do you have a checking account? Is the balance
in your checking account part of M1?
3. Do you have a savings account? Is your savings
account balance part of M1?
4. How would you describe the trends of M1 and
M2 since 1980? (See slide 5)
DataPost
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FRBSF Economic Education & Outreach