M2’s money supply increased in December to 21.5 billions of dollars, just less from its top of all time.
The M2 monetary mass measures the total amount of traffic in an economy, including liquid assets and less liquid. Meanwhile, the CPI index follows the average variation in the prices of goods and services over time, which indicates inflation.
The continuous growth of the M2 money supply is a bull indicator of risk assets because it indicates more liquidity in the system, which is generally in risk assets first.
The M2 monetary mass has timed a new monthly summit every month since January 2024. The M2 money supply influences the IPC by affecting inflation trends. While the federal reserve is actively tightened by quantitative relaxation and the maintenance of the rate of federal funds to a high level while trying to bring the IPC back to its inflation objective of 2%, the monetary mass of M2 continues to grow.
