Global liquidity has hit a record US$170.8tr. This compares to the 2023 average of US$166.6tr and the current cycle-low of US$158.8tr recorded in October 2022. Still, liquidity levels are just 8% above that low.
A typical liquidity cycle lasts 5-6 years from trough-to-trough and we are some 15 months into the current upturn. On this basis, we expect liquidity levels to rise through this year and next before peaking late on in 2025.
Source: CrossBorder Capital, US Federal Reserve, People’s Bank of China, ECB, Bank of Japan, Bank of England
The chart below plots our weekly measure of Global Liquidity growth derived from Central Bank balance sheet data. Global liquidity growth has accelerated to a near-15% 3m annualized clip. A virtuous cycle of rising Central Bank liquidity and rising collateral values is underpinning the recovery.
