On April 2, independent economist Edward Yardeni pointed out in his daily email commentary that a record amount of liquid assets was sitting on the sidelines. This chart illustrates his point, showing the MZM index of current liquid assets against the market capitalization of the Russell 3000 stock index.
MZM, or money zero maturity, has become the Federal Reserve's preferred measure of money supply. MZM counts assets with zero maturity, or those that can be immediately redeemed without suffering a penalty or a capital loss. MZM represents all money in M2 less the time deposits, plus all money market funds. The label MZM was coined by former St. Louis Fed President William Poole in 1991.