Saad Ullah
⬤ Brazil's money supply signal has turned more prominent after new data showed M4 expanding at 9.6% per year, exceeding Hanke's Golden Growth Rate (GGR) of 7.1%. Brazil inflation is running at 4.4% annually, above the 3.0% official target. The chart titled "Brazil's Annual Money Supply Growth" confirms both figures: "Official M4 Money Supply (Dec 2025): 9.6%/yr" and "Hanke's Golden Growth Rate: 7.1%/yr." Just like US money supply growth falling below the Golden Growth Rate, Brazil's divergence from the GGR benchmark is now drawing renewed attention.
⬤ The chart tracks Brazil M4 from 2020 through late 2025, showing a spike toward the high teens during 2020-2021 before a long cooling phase. Even after that moderation, the latest data point still sits above the 7.1% GGR reference line. The benchmark is labeled directly on the chart as the growth rate "consistent with hitting" the 3.0% inflation target, making the current gap easy to read at a glance.
The inflation story is fundamentally a money supply story.
⬤ This pattern is not unique to Brazil. UK money growth sitting below the Golden Growth Rate as CPI cools shows the other side of the same logic, while India M3 running above the Golden Growth Rate as inflation ticks up mirrors what Brazil is now experiencing. The framework is consistent: when money supply growth exceeds the GGR, inflation tends to stay elevated.
⬤ With Brazil M4 at 9.6% versus the 7.1% GGR, the data presents a clear macro backdrop: liquidity is expanding faster than what the stated inflation objective requires. As long as that gap persists and inflation stays above the 3.0% target, the money supply dynamic will remain central to any honest reading of Brazil's broader price stability outlook.
Saad Ullah
