Don't panic, the Federal Reserve has already turned on the faucet!
On December 1st, the Federal Reserve injected $13.5 billion into the market through overnight repurchase operations. What does this figure mean? It is second only to the scale during the 2020 pandemic crisis and even larger than during the 2000 internet bubble.
In simple terms, overnight repurchase is like a very short-term loan between the Federal Reserve and banks: when banks are tight on cash, they use government bonds as collateral to borrow money from the Federal Reserve, promising to pay it back the next day. For banks, it's an emergency turnover; for the Federal Reserve, it's a key tool for injecting liquidity into the entire financial system.
In the short term, this is a positive signal for the market. Once liquidity returns, banks will have money to lend and invest, significantly alleviating the pressure of 'lack of money' in the market. Whether it's the stock market, bond market, or cryptocurrency, all may gain support from this.
More importantly, this action itself conveys a clear attitude: the Federal Reserve is closely monitoring the market, ready to step in to support it at any time, and will not allow a crisis to happen. This undoubtedly gives investors a sense of reassurance. In times of market panic, such signals are often worth noting.