U.S. M2 Money Supply Recently Grew at the Fastest Pace Seen in 3 Years. It Could Be an Ominous Sign With Inflation at 3.4%.

Key Points M2 money supply represents money in circulation, all money in checking and savings accounts, and most money in time deposits and money market funds. Some economists believe the M2 money supply is a leading indicator of inflation. Still, the relationship between M2 and inflation is complex. These 10 stocks could mint the next wave of millionaires › Inflation continues to be an issue for the Federal Reserve, so much so that the Federal Open Market Committee (FOMC) just raised the federal funds rate for the first time in three years. In August, inflation clocked in 3.4% higher year over year on a seasonally adjusted basis, according to the Consumer Price Index (CPI). Excluding more volatile food and energy prices, core CPI rose 2.4%.