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Why You Should Care (Even If You Hate Macro)
Central-bank liquidity is the WD-40 of the world economy.
Too much → asset bubbles.
Too little → seized pistons (and your date ghosts you).
Track the flow and you front-run the pop or the crash.
2020-2025 in Four Stages
Deluge (2020-2021)
– ZIRP + record QE + US$16 trn fiscal bazooka
– Global M2 growth fastest since WWII
Dry-Out (2021-2022)
– 500 bp rate hikes, QT starts, pandemic aid expires
– 2022 = worst bond year ever (-17 %)
Plateau (2022-2024)
– Policy left on “auto-tight” to kill inflation
Pivot-Beginning (2024-2025)
– Global easing starts, though rates remain high
– Today: one foot still on the plateau, the other testing the first step down
The 2025 Mid-Year Dashboard
(🔴 = off = early = full-on)
Lever | 2017 | 2021 | Mid-2025 | Note |
|---|---|---|---|---|
Policy Rate Cuts | 🔴 hiking | emergency ZIRP | first cuts penciled for Q4-25 | watch Fed/ECB tone shift |
QE / QT | Fed taper, others buying | record global QE | QT still on; BoJ buying, PBoC selective | Fed QT continues |
Fiscal Pulse | 🔴 neutral | record stimulus | modest new packages | grid-locked US, targeted Asia |
Bank Lending Standards | easing | ultra-loose | 🔴 still tight | Fed SLOOS >40 % tight |
USD Funding Stress | low | 🔴 repo spike | FRA-OIS ~15 bp | >25 bp = red alert |
EM Liquidity (PBoC RRR) | 🔴 hikes | cuts | 25 bp RRR cut rumoured | 4000 bn CNY if triggered |
Credit Creation | slow | explosive | subdued | waiting for green light |
Risk Appetite (VIX) | 🔴 low vol | meme euphoria | VIX 15-20 | not yet risk-on |
Crypto Liquidity | 🔴 bear | DeFi summer | selective flows | stable-coin supply flat |
Equity Buybacks | normal | record | still low | await cheaper funding |
Cross-Border Flows | 🔴 strong USD | weak USD | mixed | USD still firm |
Real-Estate Credit | 🔴 tightening | boom | 🔴 global slump | waiting for policy pivot |
Key Signals to Watch Next
Fed/ECB shift to “balanced risks” language → unlocks rate-cut narrative
QT pause or full reinvestment → first net liquidity add since 2022
FRA-OIS >25 bp or GC repo spike → forces Fed backstop (S.R.F.)
PBoC 25 bp RRR cut → EM liquidity domino #1
The Bottom Line
We are not back in “deluge” mode.
Until more levers flip green, expect continued risk-on / risk-off whipsaws—not full-blown euphoria.
Why You Should Care (Even If You Hate Macro)
Central-bank liquidity is the WD-40 of the world economy.
Too much → asset bubbles.
Too little → seized pistons (and your date ghosts you).
Track the flow and you front-run the pop or the crash.
2020-2025 in Four Stages
Deluge (2020-2021)
– ZIRP + record QE + US$16 trn fiscal bazooka
– Global M2 growth fastest since WWII
Dry-Out (2021-2022)
– 500 bp rate hikes, QT starts, pandemic aid expires
– 2022 = worst bond year ever (-17 %)
Plateau (2022-2024)
– Policy left on “auto-tight” to kill inflation
Pivot-Beginning (2024-2025)
– Global easing starts, though rates remain high
– Today: one foot still on the plateau, the other testing the first step down
The 2025 Mid-Year Dashboard
(🔴 = off = early = full-on)
Lever | 2017 | 2021 | Mid-2025 | Note |
|---|---|---|---|---|
Policy Rate Cuts | 🔴 hiking | emergency ZIRP | first cuts penciled for Q4-25 | watch Fed/ECB tone shift |
QE / QT | Fed taper, others buying | record global QE | QT still on; BoJ buying, PBoC selective | Fed QT continues |
Fiscal Pulse | 🔴 neutral | record stimulus | modest new packages | grid-locked US, targeted Asia |
Bank Lending Standards | easing | ultra-loose | 🔴 still tight | Fed SLOOS >40 % tight |
USD Funding Stress | low | 🔴 repo spike | FRA-OIS ~15 bp | >25 bp = red alert |
EM Liquidity (PBoC RRR) | 🔴 hikes | cuts | 25 bp RRR cut rumoured | 4000 bn CNY if triggered |
Credit Creation | slow | explosive | subdued | waiting for green light |
Risk Appetite (VIX) | 🔴 low vol | meme euphoria | VIX 15-20 | not yet risk-on |
Crypto Liquidity | 🔴 bear | DeFi summer | selective flows | stable-coin supply flat |
Equity Buybacks | normal | record | still low | await cheaper funding |
Cross-Border Flows | 🔴 strong USD | weak USD | mixed | USD still firm |
Real-Estate Credit | 🔴 tightening | boom | 🔴 global slump | waiting for policy pivot |
Key Signals to Watch Next
Fed/ECB shift to “balanced risks” language → unlocks rate-cut narrative
QT pause or full reinvestment → first net liquidity add since 2022
FRA-OIS >25 bp or GC repo spike → forces Fed backstop (S.R.F.)
PBoC 25 bp RRR cut → EM liquidity domino #1
The Bottom Line
We are not back in “deluge” mode.
Until more levers flip green, expect continued risk-on / risk-off whipsaws—not full-blown euphoria.
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