After a 60+ Year Trend of Consecutive Annual Growth, U.S. M2 Money Supply Contracted in 2022

Following over 6 decades of consecutive growth, U.S. M2 money supply fell 1.3% from $21.5 trillion in December 2021 to $21.2 trillion in December 2022 on a seasonally adjusted basis. This contraction in M2 coincides with the Fed’s aggressive rate hikes over the course of 2022. Additionally, the Fed’s recent reduction of treasury and mortgage bond holdings has further reduced the financial liquidity of the U.S. economy.