The M2 money supply increased to $21.5 trillion in December, close to its all-time high. This measure of the total money in circulation indicates more liquidity entering the system, which is seen as a positive sign for risk assets. The M2 money supply has consistently reached new monthly highs since January 2024, and its growth impacts inflation trends. Despite the Federal Reserve's efforts to tighten money supply and control inflation, the M2 money supply continues to grow.



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