what is m3 
m3 is a measure of the money supply that includes m2 as well as large time deposits institutional money market funds short term repurchase agreements repo and larger liquid assets the m3 measurement includes assets that are less liquid than other components of the money supply and are referred to as near money which are more closely related to the finances of larger financial institutions and corporations than to those of small businesses and individuals understanding m3the money supply sometimes referred to as the money stock has many classifications of liquidity the total money supply includes all of the currency in circulation as well as liquid financial products such as certificates of deposit cds the m3 classification is the broadest measure of an economy s money supply it emphasizes money as a store of value more so than as a medium of exchange hence the inclusion of less liquid assets in m3 less liquid assets would include those that are not easily convertible to cash and therefore not ready to use if needed right away m3 for the united states as of july 2023 3m3 was traditionally used by economists to estimate the entire money supply within an economy and by central banks to direct monetary policy in order to control inflation consumption growth and liquidity over medium and long term periods in order to determine m3 each m3 component is given equal weight during calculation for example m2 and large time deposits are treated the same and aggregated without any adjustments while this does create a simplified calculation it assumes that each component of m3 affects the economy in the same way which is not the case in the actual economy this equal weighting can be considered a shortcoming of the m3 measurement of the money supply which is why it is no longer used as a true measurement of the money supply any longer disuse of m3since 2006 m3 is no longer tracked by the u s central bank the federal reserve however even before that primarily in the 1980s the fed only focused on m2 to guide policy in 1993 fed chairman alan greenspan said that the fed would no longer use any money aggregates including m2 to guide fomc policy 42the federal reserve bank of st louis and some other sources still publish m3 figures for economic data purposes 3m3 and the other m classificationsm3 can be thought of as a congregation of all the other classifications of money m0 m1 and m2 plus all of the less liquid components of the money supply m0 refers to the currency in circulation such as coins and cash m1 includes m0 demand deposits such as checking accounts traveler s checks and currency that is out of circulation but readily available 1m2 includes all of m1 and all of m0 plus savings deposits and certificates of deposit which are less liquid than checking accounts m3 includes all of m2 and all of m1 and m0 but adds the least liquid components of the money supply that are not in circulation such as repurchase agreements that do not mature for days or weeks 1