The Federal Reserve has announced it will begin purchasing short-term Treasury bills starting December 12, marking a shift in its balance-sheet strategy.

Over the next month, the Fed plans to buy roughly $40 billion in Treasury bills, as part of its “reserve management purchases” program. This move aims to rebuild liquidity in the financial system after months of tightening.

Why this matters: by buying T-bills, the Fed injects cash (reserves) back into the banking system — helping to stabilize short-term funding markets and maintain control over interest-rate settings. This is especially relevant after the Fed recently ended its quantitative-tightening program, when it had allowed securities to mature without replacement.

For markets and investors, this could ease liquidity strains that have caused volatility — potentially supporting bond markets, easing money-market pressure, and indirectly benefiting risk assets. It also signals that the Fed is actively monitoring reserve levels and willing to step in preemptively to avoid funding stress.

That said — while this step refills reserves, it is not exactly the same as broad “quantitative easing (QE)” of the past. The focus remains on short-term bills and stabilization of reserves rather than aggressive expansion of the balance sheet or long-term bond buying.

In short: with Treasury-bill purchases starting December 12, the Fed is quietly pivoting toward maintaining liquidity in the system — a subtle but important move that could calm markets and influence funding conditions in the weeks ahead.