In December, the U.S. M2 money supply soared to $21.5 trillion, just shy of its all-time high. This measure, which tracks both liquid and less liquid assets in circulation, indicates a bullish signal for risk assets, as more liquidity floods the market. 📈

Despite the Federal Reserve's efforts to tame inflation with quantitative tightening and a high Fed funds rate, the M2 money supply keeps hitting monthly records. The result? More liquidity chasing higher returns in risk-assets—and inflation still in the mix.

Is this the fuel that keeps the fire burning for markets in 2025?