The Federal Reserve injected $6.8 billion into the financial system on December 22, 2025, through a repurchase agreement (repo) operation to address year-end liquidity pressures. This was the first such liquidity-adding repo since 2020.

Financial Overview

This action is part of the Fed's routine "plumbing" to manage daily market liquidity and prevent spikes in short-term interest rates, which often tighten at the end of the year as banks hoard cash for regulatory reporting. It is considered a temporary measure and not a form of long-term quantitative easing (QE).

The $6.8 billion injection is part of a larger strategy that has seen approximately $38 billion deployed over the past 10 days to ease year-end strains. The Fed had also recently ended its quantitative tightening (QT) program on December 1, 2025, after shrinking its balance sheet by about $2.4 trillion since 2022.

Market Reaction

While officials describe the move as routine, market participants, particularly in the cryptocurrency space, are closely watching the impact.

Traditional Markets: The injection may provide a temporary boost to stock prices, with equities in sectors like technology and growth often responding positively as risk appetite increases.

Cryptocurrency Markets: Some crypto investors view the injection as a bullish signal for risk assets like Bitcoin, though some traders believe the amount is insufficient to cause a sustained rally and that the market reacts more to long-term liquidity trends.

Stock Market Performance: As of December 24, 2025, major US indices such as the S&P 500 (6,911.97 points), Dow 30 (48,472.04 points), and Nasdaq 100 (25,604.45 points) have shown slight gains, though these figures incorporate market movements over the last few days, not just the single-day impact of the repo operation.