🔴US M2 money supply hits record $23.1T in May

US M2 money supply increased +$247.8B in May 2026, reaching a record $23.1T - the largest monthly increase since May 2021 (from Fed H.6 data):
- Year-to-date (YTD), M2 has increased +$698.6B - the largest increase in the first five months of a year in half a decade
- M2 is now $1.3T higher than the previous peak in March 2022 - the period before the Fed started aggressive QT
- Since 2000, the money supply has grown an average of +6.3% per year (CAGR)
In theory, the Fed is still in the process of quantitative tightening (QT) and keeping interest rates high (3.5-3.75%). But M2 - a broad liquidity measure including cash, checking deposits, savings, and money market funds - has accelerated again since the start of 2026, after recovering from the low of $22.7T in mid-May.
This trend largely comes from federal budget deficit spending and large-scale Treasury bond issuance - this money flow injects liquidity into the banking system even as the Fed tries to drain money via QT.