The chart represents global liquidity, which tracks the flow of money in the global economy, expressed as a year-over-year percentage change.
At present, liquidity is growing at an annual rate of over 6%, the fastest increase since April 2022. This follows a recurring four-year cycle of liquidity expansion and contraction. As liquidity increases, asset prices often rise in tandem.
With central banks such as the European Central Bank and the US Federal Reserve expected to lower interest rates soon, even more funds could be injected into the economy.
