Official M2 rose by an annualised 7.3% between December and June, the strongest six-month increase since March 2022. The broader M2+ measure calculated here – which additionally includes large time deposits and institutional money funds – expanded by 8.5% over the same period. Growth of narrow money M1A (currency plus demand deposits) was faster still, at 10.6% – see chart 1.

Chart 1

Money growth is reflected in some combination of real GDP expansion, inflation and falling velocity. Even optimists would doubt that current potential GDP growth is more than 3% pa. Broad money expansion of more than 8%, therefore, requires a contraction in velocity of at least 3% pa to be consistent with 2% inflation. Such a decline is implausible on a trend basis: M2+ velocity fell by an average 0.8% pa over 1960-2025.

US monetary acceleration contrasts with weakness or slowdowns in other developed economies. Six-month broad money growth in June was 4.1% annualised in the Eurozone (non-financial M3), 2.9% in the UK (non-financial M4) and 1.3% in Japan (M3) – chart 2.

Chart 2

Six-month real narrow money momentum remains negative in the Eurozone, UK and Japan even as US growth moves above a 2024 high – chart 3.

Chart 3

The scale of the monetary divergence goes beyond signalling a stronger case for US policy tightening, suggesting that other central banks should be moving in the opposite direction to the Fed.

What explains US acceleration? Unlike other central banks, the Fed has never published a “counterparts” analysis of broad money. However, the key drivers are likely to have been stronger bank lending – commercial bank loans and leases grew by 8.2% annualised in the six months to June, up from 6.3% in the prior half-year – and the Fed’s resumption of QE (“reserve management purchases”) from December. External flows may also have contributed, partly reflecting strong foreign buying of US equities.

“Monetary financing” is a broader concept than QE, encompassing purchases of Treasury bills and notes by commercial banks and money funds as well as QE and changes in the Treasury’s balance at the Fed. The level of money growth in the US continues to be inflated relative to other developed economies by monetary financing of a much larger fiscal deficit – chart 4.

Chart 4

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Official M2 rose by an annualised 7.3% between December and June, the strongest six-month increase since March 2022. The broader M2+ measure calculated here – which additionally includes large time deposits and institutional money funds – expanded by 8.5% over the same period. Growth of narrow money M1A (currency plus demand deposits) was faster still, at 10.6% – see chart 1.

Chart 1

Money growth is reflected in some combination of real GDP expansion, inflation and falling velocity. Even optimists would doubt that current potential GDP growth is more than 3% pa. Broad money expansion of more than 8%, therefore, requires a contraction in velocity of at least 3% pa to be consistent with 2% inflation. Such a decline is implausible on a trend basis: M2+ velocity fell by an average 0.8% pa over 1960-2025.

US monetary acceleration contrasts with weakness or slowdowns in other developed economies. Six-month broad money growth in June was 4.1% annualised in the Eurozone (non-financial M3), 2.9% in the UK (non-financial M4) and 1.3% in Japan (M3) – chart 2.

Chart 2

Six-month real narrow money momentum remains negative in the Eurozone, UK and Japan even as US growth moves above a 2024 high – chart 3.

Chart 3

The scale of the monetary divergence goes beyond signalling a stronger case for US policy tightening, suggesting that other central banks should be moving in the opposite direction to the Fed.

What explains US acceleration? Unlike other central banks, the Fed has never published a “counterparts” analysis of broad money. However, the key drivers are likely to have been stronger bank lending – commercial bank loans and leases grew by 8.2% annualised in the six months to June, up from 6.3% in the prior half-year – and the Fed’s resumption of QE (“reserve management purchases”) from December. External flows may also have contributed, partly reflecting strong foreign buying of US equities.

“Monetary financing” is a broader concept than QE, encompassing purchases of Treasury bills and notes by commercial banks and money funds as well as QE and changes in the Treasury’s balance at the Fed. The level of money growth in the US continues to be inflated relative to other developed economies by monetary financing of a much larger fiscal deficit – chart 4.

Chart 4

The post US money update: further acceleration appeared first on Groupe financier Connor, Clark & Lunn ltée.

The PMI rebound may reflect a boost to sentiment from a May / June fall in energy prices, which has since reversed – see chart 1.

Chart 1

Money trends were soft even before June’s rate hike. The preferred broad measure here – non-financial M3, comprising holdings of households and non-financial corporations (NFCs) – rose by an annualised 4.1% in the six months to June, below a pre-pandemic (i.e. 2015-19) average of 4.9%. Narrow money developments are more worrying, with six-month growth of non-financial M1 falling to 2.5% last month, having peaked at 5.2% in September 2025 – chart 2.

Chart 2

The sector breakdown shows similar weakness in household and NFC M1 components. Meanwhile, six-month real narrow money momentum, which led the PMI recovery over 2023-25, turned negative in April, remaining so in May-June – chart 3.

Chart 3

Optimists cite respectable bank loan growth, of 4.6% annualised in the latest six months. Statistical studies, however, have long shown that lending is a coincident or lagging economic indicator, whereas money leads. Six-month loan growth may have peaked at 4.9% in March. The latest ECB quarterly bank lending survey, while less downbeat that the previous poll conducted at the height of Gulf hostilities, suggests a slowdown – chart 4.

Chart 4

The post Eurozone money update: signal still downbeat appeared first on Groupe financier Connor, Clark & Lunn ltée.

The PMI rebound may reflect a boost to sentiment from a May / June fall in energy prices, which has since reversed – see chart 1.

Chart 1

Money trends were soft even before June’s rate hike. The preferred broad measure here – non-financial M3, comprising holdings of households and non-financial corporations (NFCs) – rose by an annualised 4.1% in the six months to June, below a pre-pandemic (i.e. 2015-19) average of 4.9%. Narrow money developments are more worrying, with six-month growth of non-financial M1 falling to 2.5% last month, having peaked at 5.2% in September 2025 – chart 2.

Chart 2

The sector breakdown shows similar weakness in household and NFC M1 components. Meanwhile, six-month real narrow money momentum, which led the PMI recovery over 2023-25, turned negative in April, remaining so in May-June – chart 3.

Chart 3

Optimists cite respectable bank loan growth, of 4.6% annualised in the latest six months. Statistical studies, however, have long shown that lending is a coincident or lagging economic indicator, whereas money leads. Six-month loan growth may have peaked at 4.9% in March. The latest ECB quarterly bank lending survey, while less downbeat that the previous poll conducted at the height of Gulf hostilities, suggests a slowdown – chart 4.

Chart 4

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None of us is naturally comfortable with uncertainty. We prefer some sense of direction, such as a set of expectations or map that helps us understand what may lie ahead and how we might respond. Think about ordering an Uber. We choose the type of vehicle we want, see an estimated arrival time and then watch the driver’s route unfold on a map. The map does not make the car arrive any faster but reduces the anxiety of the uncertainty of when the driver may arrive.

Investing, unfortunately, does not come with the same kind of map. Financial markets are complex, constantly changing and shaped by forces that cannot be predicted with certainty. But successful investing is not about eliminating uncertainty. Instead, it is about navigating uncertainty through thoughtful decisions in spite of it. This article explores a set of decision-making principles designed to help investors navigate uncertainty with greater discipline, confidence and perspective.

Decision-making principles

Decision-making is often viewed as choosing between alternatives, but the real value lies in the process that precedes the choice. Effective decision-making requires clarity about objectives, an understanding of the available options and a careful assessment of the potential consequences. It is less about finding the “right” answer and more about making choices that can withstand changing circumstances. A robust process helps distinguish between actions that are merely appealing today and those that remain resilient over time.

In investing, uncertainty is unavoidable. Success does not come from predicting the future with precision, but from making decisions that can perform across a range of outcomes. By applying disciplined principles around forecasting, risk-taking, diversification, behavioural awareness and managing groupthink, investors can build portfolios and decision frameworks that are better equipped to navigate whatever the future may bring. Uncertainty never disappears, but a strong decision-making process can transform the unknown from a possible threat into something that can be managed.

Principle 1 – Understand the role of predictions

Every investment decision is a prediction. Whether we realize it or not, allocating capital reflects a view about how the future may unfold. The challenge is that the future is unknowable. That is why the goal of prediction is not accuracy for its own sake, but better decision-making. Predictions help investors assess possibilities, weigh probabilities and make more informed choices in an uncertain world.

The key is recognizing that investing is a game of probabilities, not certainties. Rather than asking “What will happen?”, investors should ask “What could happen, and how should I prepare for it?” That shift in mindset can lead to more resilient portfolios and better long-term outcomes.

Principle 2 – Take risks deliberately

The most successful investors understand that uncertainty is a permanent feature of markets and that avoiding risk altogether is often the greatest risk of all. Instead, they take risks deliberately, focusing on opportunities where the potential reward justifies the uncertainty and constructing portfolios that can withstand a range of outcomes. Predictions play a vital role, not because they reveal the future, but because they help investors evaluate probability, challenge consensus views and identify where expectations may be misplaced. Risk management then takes over, ensuring the portfolio remains robust even when those predictions prove wrong. The combination of the two creates a powerful framework for navigating uncertainty. Think of it as prediction being about reducing uncertainty, while risk management is about succeeding despite it.

Principle 3 – Diversification needs to work harder

Diversification matters, but it cannot be set and forgotten. The recent period of rising inflation and bond yields was a reminder that equities and bonds can fall together, and that bonds may protect if growth weakens, but not if inflation expectations rise. Many investors have moved beyond equities and bonds introducing a component of alternative investments, but these are not without their own challenges in times of stress. The point is not to own a bit of everything; instead, the decision should be to know why you own each exposure, what returns it delivers or what risk it mitigates and whether you are still being rewarded to invest in it.

Principle 4 – Understand the impact of emotional influence

Investors spend considerable time trying to understand markets, economies and companies. Yet some of the most important drivers of investment outcomes come from within. Fear can magnify risks. Optimism can overlook them. Confidence can create conviction, but it can also create complacency. Understanding these emotional forces is a critical part of successful decision-making.

The objective is not to remove emotion from investing, but to recognize its influence. Investors who develop emotional awareness and discipline are often better positioned to make consistent decisions, remain committed to long-term objectives and navigate uncertainty without being driven by it. This is where emotional intelligence can contribute to more successful investment outcomes.

Principle 5 – Beware of groupthink and overconfidence

The quality of a committee’s decisions is often determined not by how quickly it reaches agreement, but by how effectively it challenges its own assumptions. Groupthink and overconfidence can emerge when optimism goes untested. Mental contrasting provides a practical antidote. By asking committee members to envision both the most desirable realistic outcome and the obstacles that could derail it, the conversation shifts from confirmation to exploration. This approach not only improves the quality of decisions but also encourages constructive dissent, strengthens governance and fosters a culture where challenging ideas are viewed as a contribution rather than criticism.

Principle 6 – Appreciate the benefit of adaptability

In practice, adaptability can take many forms: reassessing capital market assumptions, refining portfolio positioning, revisiting liquidity needs or updating governance processes as conditions evolve. Adaptability is often the bridge between a sound strategy and successful outcomes. While no investor can foresee every economic shift or market disruption, those who remain flexible in their thinking and disciplined in their decision-making are better equipped to respond to changing conditions. In an uncertain world, the ability to adapt may be just as valuable as the ability to forecast.

Navigating uncertainty

The future will always be uncertain. Success belongs not to those who predict it most accurately, but to those who are best prepared for the many ways it may unfold. Uncertainty is not a temporary condition that investors must endure until markets become clearer. It is a permanent feature of investing. The challenge is not to eliminate uncertainty but to make sound decisions despite it.

While forecasts, models and analysis can improve our understanding of what may lie ahead, they cannot provide certainty about the future. The most successful investors recognize that investment success comes from building robust decision-making processes that acknowledge uncertainty, evaluate probabilities and remain adaptable as the latest information emerges. This requires taking risks deliberately, diversifying with purpose, challenging assumptions, encouraging constructive debate and maintaining the discipline to adjust when the facts change.

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L’intelligence artificielle (IA) est souvent présentée comme un défi technologique, mais son adoption réussie repose avant tout sur le leadership et la transformation des activités.

Dans un récent article de Human Resources Director, Ankur Saxena, directeur, Stratégie technologique, et Diana Bartolic, chef des Ressources humaines, expliquent pourquoi l’adoption de l’IA exige bien plus que de nouveaux outils et de nouvelles technologies. Elle nécessite un leadership dédié, une gouvernance efficace, une gestion du changement réfléchie et un engagement à aider les employés à s’adapter à l’évolution des rôles et des façons de travailler.

Comme le souligne Ankur, l’IA est « en grande partie une initiative de transformation des activités, plutôt qu’une initiative technologique ». Diana insiste pour sa part sur l’importance de soutenir les employés pendant cette période de transformation importante du milieu de travail et de veiller à ce que les organisations disposent des structures nécessaires pour gérer le changement de façon responsable.

Au Groupe financier CC&L, nous croyons que la création de valeur à long terme grâce à l’IA exige d’investir non seulement dans la technologie, mais aussi dans le capital humain, les processus et le leadership nécessaires pour en assurer une adoption efficace, responsable et conforme aux objectifs d’affaires.

Lire l’article complet : AI enablement officer: the new sheriff in transformation town (en anglais seulement)

The post L’IA est moins une question de technologie que d’affaires : Ankur et Diana donnent leur point de vue appeared first on Groupe financier Connor, Clark & Lunn ltée.

Artificial intelligence (AI) is often discussed as a technology challenge, but its successful adoption is fundamentally a leadership and business transformation challenge.

In this recent Human Resources Director article, Ankur Saxena, Director, Technology Strategy, and Diana Bartolic, Head of Human Resources, share their perspectives on why AI enablement requires more than new tools and technology. It requires dedicated leadership, effective governance, thoughtful change management and a focus on helping people adapt as roles and ways of working evolve.

As Ankur notes, AI is “largely a business change impact initiative and less of a technology initiative.” Diana highlights the importance of supporting employees through a period of significant workplace transformation and ensuring organizations have the right structures in place to navigate change responsibly.

At CC&L Financial Group, we believe creating long-term value from AI means investing not only in technology, but also in the people, processes and leadership needed to make adoption effective, responsible and aligned with business objectives.

Read the full article: AI enablement officer: the new sheriff in transformation town

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Investor views on China have become increasingly polarized, creating both challenges and opportunities for active managers. While concerns about economic growth, geopolitical tensions and market regulation continue to shape sentiment, China’s scale and importance within the emerging markets universe make it difficult for investors to ignore.

In a recent interview with Benefits and Pensions Monitor, Michael Mortimore discusses the factors influencing China’s investment outlook and why a selective, fundamentals-driven approach remains essential in today’s environment. He explores the structural challenges facing the Chinese economy, the implications for investors and the developments that could help support a more sustainable path forward.

As Michael explains, “If China was able to reinvigorate domestic demand and also curb the incentives that basically fuel all this excess capacity, we think that that would be a really, really positive development and really bullish for long term prospects for China as a whole and the sustainability of its economic model.”

Read the full article for Michael’s perspective on navigating uncertainty, evaluating risk and identifying long-term opportunities in one of the world’s most consequential investment markets: Is China still worth the risk for emerging market investors?

The post China beyond the headlines appeared first on Groupe financier Connor, Clark & Lunn ltée.

Investor views on China have become increasingly polarized, creating both challenges and opportunities for active managers. While concerns about economic growth, geopolitical tensions and market regulation continue to shape sentiment, China’s scale and importance within the emerging markets universe make it difficult for investors to ignore.

In a recent interview with Benefits and Pensions Monitor, Michael Mortimore discusses the factors influencing China’s investment outlook and why a selective, fundamentals-driven approach remains essential in today’s environment. He explores the structural challenges facing the Chinese economy, the implications for investors and the developments that could help support a more sustainable path forward.

As Michael explains, “If China was able to reinvigorate domestic demand and also curb the incentives that basically fuel all this excess capacity, we think that that would be a really, really positive development and really bullish for long term prospects for China as a whole and the sustainability of its economic model.”

Read the full article for Michael’s perspective on navigating uncertainty, evaluating risk and identifying long-term opportunities in one of the world’s most consequential investment markets: Is China still worth the risk for emerging market investors?

The post China beyond the headlines appeared first on Groupe financier Connor, Clark & Lunn ltée.

The Fed’s latest semi-annual Monetary Policy Report to Congress contains a paragraph discussing recent trends in the M2 money measure, included, apparently, at the behest of Chair Warsh.

In follow-up Q&A, Chair Warsh explained that he is not a “monetarist” but nevertheless holds the “old-fashioned view that monetary policy has something to do with money”.

Meanwhile, perhaps not coincidentally, former Fed Governor Miran has co-authored a paper that attempts to rehabilitate the P* monetarist approach to inflation forecasting.

P* is the level of prices implied by the current money stock, incorporating assumptions about trend GDP and velocity. The gap between P* and the prevailing price level P is a measure of future inflationary (or disinflationary) pressure. Miran et al present estimates of the price gap based on M2 and other (Divisia) money measures, showing that these gaps exhibit a statistically significant relationship with future inflation.

Both the Fed report and the Miran paper suggest that current monetary trends are non-inflationary. The former notes that annual M2 growth averaged 4.7% in the first five months of the year, which is “closer to the range typically observed in the 2010s”, when inflation undershot the 2% target.

Similarly, the current price gap estimates presented by Miran et al are all around zero, implying that “the stance of monetary policy is quite close to neutral right now, putting neither upward nor downward pressure on the inflation rate”.

A cynic might wonder if the appearance of these references to monetary trends has been motivated by a search for arguments to push back against a strengthening case for policy tightening based on conventional economic data (reflected in the Fed policy direction model discussed in previous posts).

In any case, the assessment that current trends are unthreatening may soon be out-of-date. Year-to-date annual M2 growth of 4.7% conceals a pick-up in six-month expansion to a 7.1% annualised pace in May. The broader M2+ measure calculated here rose by 8.2% over the same period – see chart 1.

Chart 1

The recent acceleration suggests that the Miran et al price gap estimates are now positive.

By contrast, six-month growth of the Bank of England’s M4ex broad money aggregate was 4.4% annualised in May, with the non-financial M4 measure preferred here rising by just 2.8%.

The Bank’s quarterly Monetary Policy Report (or Inflation Report before November 2019) contained no mention of money between May 2019 and May 2023, a period during which annual non-financial M4 growth reached 16.0%. A reappearance in August 2023 coincided with the annual rate of change turning negative. Editions in May 2024 and May 2025 included boxes discussing broad money developments in detail.

Still, there is no evidence from the minutes that monetary considerations have played a role in any decisions of any MPC member. Regular references to money trends are, it appears, little more than a box-ticking exercise. The same will likely be true at the Fed.

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