FED ENDS TIGHTENING AND SUPPORTS LIQUIDITY RETURN FOR BANKS THROUGH REPO

🔸 FED has injected $13.5 billion into banks through repo operations, marking the second-largest liquidity support in one day since COVID. The goal is to reduce short-term capital demand pressure in the banking system.

🔸 Repo operations occur when the FED lends money to banks for very short periods, usually overnight, using government bonds as collateral. Banks commit to repurchase these assets later at a higher price. This is not money printing as many think because the money will return to the FED, but it indicates that liquidity in the system is still tight.