Global M2 Growth Hits 6.8% as Sovereign Deficits Overwhelm Central Bank Tightening

2026-10-31, FP360 — Global aggregate M2 money supply expanded 6.8% year-over-year in September, reaching $108.2 trillion, even as the Federal Reserve maintains its policy rate at 4.25%. This divergence, driven by sovereign deficit spending that monetizes debt, means liquidity is rising while central banks try to tighten — a dynamic that supports risk assets but keeps inflation sticky.

The Signal: Liquidity tailwinds from fiscal deficits are overpowering central bank tightening, favoring risk assets and steepening yield curves.

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Originally published on FINPULSE 360