Federal Reserve Injects $31B in Liquidity, Largest Since COVID Crisis
The Federal Reserve's $31 billion overnight repo operation on January 1, 2026 marks the most significant liquidity injection since March 2020. December's cumulative liquidity support surpassed $40 billion, echoing pandemic-era market interventions.
Market participants are scrutinizing the scale of these operations, as such volumes typically signal underlying stress in short-term funding markets. The Fed's actions coincide with heightened economic uncertainty, drawing attention from both traditional and crypto investors seeking shelter in alternative assets.
FRED data reveals this intervention exceeds Dot-com bubble levels, with repo operation graphs showing characteristic stress-indicative spikes. The timing suggests deliberate year-end stabilization efforts, though the magnitude implies deeper systemic considerations.
