The Federal Reserve quietly injected 13.5 billion dollars into the US banking system through an overnight repurchase operation, according to data highlighted on X by market analytics firm Barchart. The move marks the second largest liquidity addition of its kind since the COVID 19 crisis.
The operation suggests US banks sought a sizeable amount of short term funding, an indicator analysts often watch for early signs of tightening liquidity conditions. The injection followed the Fed decision to end its multi year quantitative tightening program on December 1, which had removed more than two trillion dollars from the financial system.
Market observers noted that repo demand of this scale typically reflects stress or caution in interbank lending. While liquidity boosts can support risk assets, traders are watching whether the move signals deeper fragilities in funding markets.
Implications for global markets
The development arrives as global interest rate expectations shift, with major central banks weighing cuts in 2026. Additional liquidity in the United States may influence capital flows, exchange rate movements and risk sentiment worldwide.
Crypto markets reacted with moderate volatility. Some analysts argue that liquidity injections tend to support digital asset prices, while others warn that broader macroeconomic conditions remain uncertain.
The Fed has not issued further comment on the operation, and it remains unclear whether more liquidity support will follow in the coming weeks.