When the Federal Reserve's repurchase operations release a massive amount of liquidity, its impact has long surpassed the U.S. domestic market, creating a global "liquidity wave." As the world's primary reserve currency issuer, the Federal Reserve's repurchase agreement plan profoundly changes the pricing logic of global assets through the dollar circulation mechanism, triggering a chain reaction in the stock market, bond market, foreign exchange market, and precious metals market. After the Federal Reserve launched the "unlimited repurchase + interest rate cut" combination at the end of 2025, the global financial market displayed a distinct differentiation pattern. Behind this pattern is the liquidity reallocation and risk preference adjustment triggered by the repurchase agreements. A deep interpretation of this global transmission effect is of great significance for grasping the direction of global asset allocation.
The Federal Reserve's repurchase agreements directly drive the reconstruction of global risk asset valuations through the 'dollar liquidity spillover' effect. A portion of the liquidity injected into the U.S. financial system through repurchase operations flows into global markets via cross-border investments and carry trades, particularly into emerging markets and growth assets with relatively high yields. After the Federal Reserve lifted the repurchase limit in December 2025, global stock markets displayed a clear 'liquidity-driven' trend: the S&P 500 index approached historical peaks, with growth sectors like AI computing and semiconductors leading the gains. This is due to the fact that, in a low-interest-rate environment, the liquidity injected by repurchases has lowered the risk-free yield, enhancing the valuation appeal of growth stocks; emerging market equities also experienced capital inflows, with net inflows of funds in the Shanghai-Shenzhen Stock Connect significantly increasing, and sectors like semiconductors and communication equipment becoming focal points for investment. This structural rise in global stock markets is essentially the result of the redistribution of Federal Reserve repurchase liquidity in global asset markets, reflecting the market's pursuit of liquidity benefits.
In the bond market, the Federal Reserve's repurchase agreements reshape the global bond pricing system by influencing interest rate expectations and the supply and demand for funds. The liquidity released by repurchase operations has increased market demand for government bonds, lowering government bond yields, especially short-term government bond yields. The Federal Reserve's repurchase rate cut in 2025 and unlimited operations drove the U.S. 10-year Treasury yield below 3%, triggering a downward trend in the global bond market. For emerging markets, the decline in U.S. Treasury yields alleviated capital outflow pressure, and many emerging economies took the opportunity to lower government bond issuance rates, reducing financing costs. However, at the same time, the inflation expectations brought by repurchase agreements have also led to upward pressure on long-term bond yields in some countries, forming a differentiated pattern of 'short-term easing and long-term concerns.' Moreover, the Federal Reserve's repurchase agreements provide liquidity support to foreign central banks, such as the establishment of the FIMA repurchase tool, which has prevented foreign central banks from disorderly selling U.S. Treasury bonds, stabilizing the supply and demand relationship in the global Treasury market and ensuring the smooth operation of the global bond market.
The fluctuations in the foreign exchange market clearly demonstrate the global spillover effects of the Federal Reserve's repurchase agreements. The liquidity easing and interest rate declines brought about by repurchase operations have weakened the attractiveness of the U.S. dollar, pushing the dollar index into a mild depreciation channel. After the Federal Reserve launched a series of easing measures in December 2025, the dollar index fell by 3% within a month, while non-U.S. currencies generally welcomed a window of appreciation. Among these, the renminbi, as an emerging market currency with both safety and growth potential, benefited from capital inflows and trade surpluses, returning to the 6.8-7.0 range against the dollar. However, the depreciation of the dollar is constrained by the policies of other major economies—both the European Central Bank and the Bank of Japan have implemented easing policies simultaneously, keeping the interest rate differentials between major currencies relatively stable and avoiding a unilateral collapse of the dollar. This adjustment in exchange rate dynamics not only affects global trade balances but also alters multinational corporations' profit expectations and asset allocation strategies, further intensifying the interconnectedness of global financial markets.
The precious metals market has become the 'biggest winner' of the Federal Reserve's easing effects from the repurchase agreements. Gold, as a zero-yield asset, shows a strict negative correlation with real interest rates. The interest rate cut expectations and rising inflation brought by the Federal Reserve's repurchase operations have driven real interest rates down, greatly increasing gold's demand for hedging and value preservation. Former New York Fed expert Mark Cabana predicts that this round of easing will push gold prices to challenge $4500-$5000 per ounce. Silver, benefiting from its dual advantages of industrial properties and precious metal attributes, is expected to outperform gold, becoming a more elastic investment target. The recovery expectations in global manufacturing, combined with liquidity easing, have enhanced both industrial demand for silver and its value-preserving properties. This rise in precious metal prices essentially reflects the market's concerns about inflation risks that may be triggered by the Federal Reserve's liquidity easing, as well as a direct manifestation of global capital seeking safe-haven assets.
The global impact of the Federal Reserve's repurchase agreements has a distinct 'double-edged sword' effect. On one hand, the injection of liquidity eases tensions in the global financial markets, providing support for economic recovery; on the other hand, excessive easing may foster asset bubbles and exacerbate the fragility of global financial markets. For emerging markets, while they benefit in the short term from capital inflows and reduced financing costs, they face potential risks of U.S. dollar liquidity contraction in the long term. If they fail to timely improve their financial systems and enhance risk resilience, they may fall back into a vicious cycle of 'capital outflow - currency depreciation - debt crisis.' Therefore, countries around the world need to closely monitor the policy trends of the Federal Reserve's repurchase agreements, formulate differentiated response strategies according to their economic conditions, and strengthen financial risk defenses while seizing liquidity benefits.
Follow me@币圈罗盘 to understand the underlying logic of contract strategy next time, helping you avoid detours and earn real money!#美联储回购协议计划 $BTC $ETH
