Global Money Supply Hits $142T, Fed Eyes QE Return

The global financial system is experiencing an unprecedented monetary expansion, with broad money supply reaching $142 trillion as of September—representing a staggering 6.7% year-over-year growth. According to analysis from The Kobeissi Letter, this marks a 446% increase since 2000, equivalent to $116 trillion in additional liquidity injected into the global economy over the past 24 years. The compounded annual growth rate of 7.0% demonstrates a consistent pattern of monetary expansion that shows no signs of slowing.

China now leads this monetary expansion with $47 trillion in broad money supply, followed closely by the European Union at $22.3 trillion and the United States at $22.2 trillion. This tripartite dominance in global liquidity creation means that monetary policy decisions in these economic powerhouses have far-reaching implications for asset classes worldwide. As one analyst noted, ‘Money supply is through the roof,’ creating a flood of potential capital hunting for yield and shelter from currency debasement.

New York Fed President John Williams delivered a watershed signal at the European Bank Conference, indicating that the era of Quantitative Tightening (QT) may soon give way to renewed Quantitative Easing (QE). Williams confirmed the central bank is poised to end its balance sheet reduction program and may need to expand its balance sheet again to support market stability. ‘Once the balance sheet has reached ample reserves,’ Williams told attendees, ‘it will then be time to begin the process of gradual purchases of assets.’

This explicit hint at resumed bond purchases marks a significant pivot in Federal Reserve policy. Many analysts now expect the Fed could restart asset acquisitions as early as Q1 2026, which would represent a fundamental shift in global liquidity conditions. The timing aligns with what macro investor Raoul Pal describes as ‘The Liquidity Flood’ that lies ahead, urging investors to navigate through what he terms the ‘Window of Pain’ before the monetary spigots reopen fully.

As global liquidity surges, the question becomes where this massive capital flow will find its home. Historical patterns suggest that risk assets, hard assets, and new money narratives become primary beneficiaries during such monetary expansions. Bitcoin, despite its notorious volatility, appears better positioned than ever to absorb the next reallocation wave, particularly as bond yields compress and traditional assets show signs of stagnation.

The institutionalization of Bitcoin provides a structural foundation for capital absorption that didn’t exist during previous liquidity cycles. As Dan Tapiero, founder of 10T Holdings and a longstanding macro trader, reminds market participants: ‘This bull phase in BTC and crypto ends when no one thinks it’s ending (ie not now)… Bad price action is supposed to shake weak hands. Mkts 101.’ His perspective underscores that current market volatility may represent consolidation rather than trend reversal.

The combination of massive money supply growth and central bank pivots creates what many seasoned investors see as the perfect setup for another speculative surge in digital assets. When liquidity flows of this magnitude enter the system, they must find productive deployment, and the sequence of global money supply movements suggests digital assets like Bitcoin may be prime beneficiaries. As weak hands wobble during periods of price pressure, the structural story of expanding liquidity and central bank accommodation remains fundamentally bullish for crypto markets.