When the market pulled back, the Fed stepped in!

On December 1st, the Federal Reserve conducted a $13.5 billion overnight repo operation. How big is this? Aside from the peak of the 2020 pandemic, this is the strongest move yet—even surpassing the level seen during the bursting of the dot-com bubble in 2000.

Let me briefly explain what an "overnight repo" is—basically, when banks are short on cash, they take their Treasury bonds to the Fed and say, "Lend me some cash to get through this, I’ll pay it back tomorrow." The Fed agrees, and the money is credited. Sounds simple, but the impact is significant.

What does this mean for the market? Liquidity is back! With cash on hand, banks can lend more or invest more confidently. With more money flowing, the stock market, bond market, and even our crypto sector could all get a boost from this injection of funds.

More importantly, this move by the Fed sends a signal: it’s always watching the market and won’t just stand by and watch it crash. In moments like this, panic selling is often the worst choice. Sometimes, the best opportunities are hidden in others’ moments of panic.

Of course, a short-term boost doesn’t mean you can go all-in without thinking. The market’s direction still depends on upcoming data and policy moves, but for now, the Fed has played its liquidity card.