InfraCap Report Update, New York, NY ~ The team at Infrastructure Capital Advisors tracks the Global Monetary Base, defined as currency in circulation plus bank reserves, as an indicator of current and future interest rates. This article provides data and insights for December 2024 data released in January 2025.
December Global Monetary Base (GMB):
GMB was essentially flat MoM but has fallen by $977 billion or 3.9% over the last twelve months. Inflation is caused by excessive monetary growth, but the money supply has shrunk by 4% over the last year. We expect that the GMB will stabilize over the next quarter and start growing in 2025 as the European Central Bank (ECB) and the Peoples Bank of China (PBOC) are forced to ease monetary policy in response to a recession in Europe and slow growth in China. Recent economic data show that inflation continues to steadily moderate with recent PCE core coming in at 0.1% and PPI coming in at 0.2%, and CPI coming in at only 0.2%. We forecast that Core PCE will come in at a cool 0.2% at month end.
If the Global Monetary Base remains flat through the beginning of 2025, we expect interest rates to also stabilize and decline in the first half of 2025 as central banks cut rates in response to slow or negative growth. Declining global interest rates and a flat to increasing GMB will support the global stock and bond markets.


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