What Is M1 Money Supply?
M1 money supply is the Federal Reserve’s narrowest money aggregate — currency in circulation and checking deposits, plus savings deposits since May 2020. That May 2020 reclassification added $11.2 trillion to M1 in one month — not new money, just money counted under a new heading (Federal Reserve H.6 technical Q&A; FRED series M1SL).
We hold no M1 series of our own. Every M1 level here is external, dated, and sourced on the line. That means M1SL at FRED — the St. Louis Fed’s data portal — unless another publisher is named.
What M1 money supply includes
What is M1 money supply — M1 narrow money, by the Federal Reserve definition — before May 2020? Two layers: physical currency in circulation, and demand deposits. That’s the balance in a checking account — spendable without delay. The Fed publishes it as M1SL in its H.6 release, mirrored on FRED.
Savings deposits sat outside M1 entirely before that date. They counted toward M2 broad money instead. In May 2020 the Fed reclassified savings deposits as transaction accounts and folded them into M1.
The two original layers are still there. Savings deposits now sit on top of them — near money, a short step from cash rather than spendable on the spot. The M0 monetary base sits one rung below M1 on the liquidity ladder: currency plus the reserves banks hold at the Fed, money a central bank creates directly, not money a household can spend.
The May 2020 M1 money supply redefinition
The redefinition, not new lending or new government spending, is why an M1 chart shows a vertical cliff in May 2020. The Fed’s own technical Q&A states the mechanism directly: “Recognizing savings deposits as a transaction account as of May 2020 will cause a series break in the M1 monetary aggregate… M1 will increase by the size of the industry total of savings deposits, which amounted to approximately $11.2 trillion.”
FRED’s own M1SL series shows the jump up close: $4.86 trillion in April 2020, $16.31 trillion the next month — a rise of $11.46 trillion, close to the Fed’s own $11.2 trillion estimate. The small gap is later data revisions, not a different number. The Mises Institute’s 2023 account of the same two months lines up: M1 “skyrocketed to $16.24 trillion” from a base near $4.79 trillion, an independent outlet confirming the same jump three years on.
By March 2022, M1 had reached $20.75 trillion (FRED M1SL). A widely-read correction posted to r/wallstreetbets walked through the same Fed Q&A line by line (u/the_buddhaverse, 2022-05-16, 325 upvotes, 164 replies) — the version of this arithmetic that actually reached this audience.
None of that $11.2 trillion was new money. It had already been counted, inside M2, the whole time — just under a different heading. That misread chart produced the “80% of all dollars printed” claim. We trace the full arithmetic at our fact-check of that claim.
M1 vs M2 money supply: what changed after the redefinition
Before May 2020, M1 was a small slice of M2 — both figures FRED’s own H.6 release (M1SL, M2SL). M1 read $4.32 trillion against M2’s $16.03 trillion in March 2020, a ratio of about 3.7 to 1. One month before the redefinition, in April 2020, the gap was similar: $4.86 trillion against $17.06 trillion, 3.5 to 1.
The reclassification closed most of that gap in a single month. By May 2020, M1 read $16.31 trillion against M2’s $17.93 trillion — a ratio of 1.10 to 1. M2 barely moved across the redefinition, up only $868 billion, because the deposits it counted did not change. Only which layer counted them changed. Only small time deposits under $100,000 and retail money market funds now separate the two aggregates.
That narrow gap has held. FRED’s own numbers for June 2026 put M1 at $19.83 trillion and M2 at $23.16 trillion (M1SL, M2SL) — a ratio of 1.17 to 1, still far below the pre-2020 spread. M2, not M1, is the series economists — and this site — track for growth and cross-country comparison. We cover why M2 is the one that matters and what the same idea is called outside the United States.
A chart that plots pre-2020 M1 against post-2020 M1 crosses that boundary: it reads like four decades of near-flat growth followed by an overnight tripling. It’s a definitional line moving, not a change in what anyone actually holds.
FAQ
What does M1 money supply include that M2 doesn’t?
Nothing, since May 2020 — M1 is now fully contained inside M2. Before that date, M1 held only currency plus checking deposits, with savings deposits sitting in M2 alone. Every M1 dollar today is also counted in M2, one layer up the M0-M4 ladder — the same ladder M3 and M4 sit on. Every term on it is defined at our money supply glossary.
Is M2 bigger than M1 money supply?
Yes, always. M2 is built as M1 plus additional layers — small time deposits and retail money market funds — so it can’t fall below M1. Our own current figure is IMF harmonised broad money, not the Fed’s own M2: $30.68T (2025-12, quarterly) — running well above the Fed’s M2 because it covers a wider set of instruments. For a same-source reading, FRED’s own numbers put M1 at $19.83T and M2 at $23.16T, both June 2026.
Why did the Fed redefine M1 money supply in 2020?
The Fed reclassified savings deposits as transaction accounts, folding roughly $11.2 trillion into M1 in a single month (Federal Reserve H.6 technical Q&A, on the May 2020 series break). The change tracked how savings accounts had come to function. They had become transferable on demand, much like a checking account — not a change in the deposits themselves.
What is the difference between M1 and M2 money supply?
M1 is currency plus checking and, since May 2020, savings deposits — money spendable without delay. M2 adds small time deposits and retail money market funds on top. We hold M2-equivalent data (IMF harmonised broad money) for 185 economies. Full sourcing is documented at methodology; we hold no M1 series of our own.