M2 Money Supply

M2 measures how much money is circulating through the economy. Fast growth (above ~8% YoY) signals loose monetary policy and typically precedes inflation or asset bubbles with an 18-24 month lag. Negative growth — like 2022-2023's rare contraction — signals severely tight conditions and usually precedes economic slowing. It's a useful framework for understanding whether the monetary tide is coming in or going out, which shapes what happens to inflation, housing, and risk assets over the following two years.