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The M1 jump is not new money for the most part, it's a reclassification of things that used to be M2 as also being M1 (liquid) https://fredblog.stlouisfed.org/2021/05/savings-are-now-more...

M2 increased in 2020, but not by as much as you're saying https://fred.stlouisfed.org/series/M2SL

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Thanks for sharing. I never knew that. The post says savings accounts were moved into M1 because they're pretty liquid now. But what was the real rationale or implications? Odd time to do that move (April 24, 2020)

It was because in April 2020 Regulation D was amended to remove the six-transfer-per-month rule. The idea is that COVID may force people to make withdrawals from savings account more often so banks could allow frequent withdrawals from savings accounts, making them more liquid. It's not a coincidence that after the Fed suspended the rule they reclassified savings account as M1.

https://www.federalreserve.gov/supervisionreg/caletters/calt...

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