M3

M3 is a monetary aggregate that includes M2 plus certain near moneys, such as savings deposits (including money market deposit accounts), small time deposits, and money market mutual funds. M3 is the broadest measure of the money supply.

M3 is used by central banks to track the money supply and to make monetary policy decisions. The Federal Reserve defines M3 as "the sum of currency outside the U.S. Treasury, demand deposits (checking accounts), other checkable deposits (including NOW accounts), savings deposits (including money market deposit accounts), small time deposits (less than $100,000), and money market mutual fund shares."

M3 is a useful measure of the money supply because it includes a wide range of financial assets that are used for transactions and investment purposes. However, M3 is also a volatile measure of the money supply, and it can be difficult to interpret.

The Federal Reserve does not target M3 for monetary policy purposes. Instead, the Fed focuses on the narrower monetary aggregates M1 and M2. M1 includes currency, demand deposits, and traveler's checks. M2 includes M1 plus savings deposits, money market deposit accounts, and small time deposits.

The Fed uses M1 and M2 to track the money supply and to make monetary policy decisions. The Fed believes that M1 and M2 are more stable measures of the money supply than M3.

M3 is still used by some economists and analysts to track the money supply. However, M3 is not as widely used as M1 and M2.