In May 2020, the Federal Reserve adjusted the definition of M1 money supply to include savings accounts, which were previously only part of the M2 money supply. This change was due to an amendment in Regulation D, which previously limited the number of transfers or withdrawals from savings accounts to six per month. When this restriction was lifted, savings accounts became functionally equivalent to checking accounts, thus qualifying them to be included in the M1 aggregate.

This adjustment led to a significant increase in the reported M1 money supply because it effectively added the balances of savings accounts into M1, which were not counted there before. This reclassification caused M1 to skyrocket as it essentially absorbed a large portion of what was formerly considered part of M2. This redefinition did not reflect new money being created but rather a shift in how existing money was categorized.