The Federal Reserve plans to inject roughly $6.8 billion into financial markets on December 22, 2025, through a repurchase agreement operation.
The move marks the Fed’s first liquidity-adding repo operation since 2020, separate from any quantitative easing programme.
The operation is part of broader year-end liquidity management, with around $38 billion deployed over the past 10 days.
Federal Reserve officials described the action as a routine response to seasonal funding pressures.
Year-end periods typically strain liquidity as banks adjust balance sheets and meet regulatory requirements.
Repo operations allow the Fed to lend cash to banks in exchange for high-quality collateral such as US Treasury securities.
These transactions are usually short term and often unwind within a single day.
The primary goal is to prevent spikes in short-term interest rates and maintain orderly market conditions.
Federal Reserve data show that the secured overnight financing rate market averaged $2.7 trillion in daily volume in 2025.
More than $1 trillion of that activity was conducted through repo transactions.
The December 22 operation is capped at $6.801 billion on the Fed’s public schedule.
Unlike standing repo facilities introduced in 2021, this operation directly adds liquidity to the system.
On December 10, the New York Fed updated its overnight repo framework to a full allotment model.
The changes removed aggregate transaction limits and set individual bid caps at $40 billion.
Officials said the updates give the Fed greater flexibility to manage liquidity and interest rates.
Some market participants speculated the move signalled a shift in monetary policy.
Analysts largely dismissed those claims, noting repos differ fundamentally from quantitative easing.
Repo operations are temporary and do not permanently expand the Fed’s balance sheet.
Key thing is that this ain’t QE, ain’t printing money, and ain’t a signal the Fed’s easing policy ’cause the cash gets repaid.
ImNotTheWolf said.
Despite this, the operation highlights tighter liquidity conditions in funding markets.
The Fed also announced Reserve Management Purchases of Treasury bills starting December 11.
Those purchases total about $40 billion and aim to maintain ample system reserves.
Crypto market participants have closely followed the liquidity injections.
Traders often view increased liquidity as supportive for risk assets.
Historically, digital asset prices have benefited during periods of easier funding conditions.
Some investors see the repo operation as indirectly bullish for crypto markets.
The central bank has reiterated that its broader policy stance remains restrictive.
Officials continue to target inflation control rather than economic stimulus.
Market watchers say the coming weeks will clarify whether the move is purely seasonal.
At the time of reporting, Bitcoin price was $88,908.83.