The Fed has opened the faucet of liquidity again, but this round of point shaving is not evenly distributed.

On the evening of December 22, Beijing time, the Fed injected about $6.8 billion into the market through repurchase agreements. This is the third time in the last 10 days, with a total of $38 billion released. The officials call this "year-end liquidity management," which sounds very technical, but the old players in the market can sense something is off.

From my years of experience, this is far from just a seasonal operation; it is a prologue to a significant movement of Liquidity.

**Surface Reasons vs Real Cards**

The Fed claims that these repurchases are to address the year-end liquidity crunch and stabilize the banking system. However, peeling back a layer reveals several intriguing details.

In terms of scale, this round of injection is clearly extraordinary. The QT officially ended on December 1, and the Fed immediately injected $13.5 billion into the banking system through overnight repos. How impressive is this number? It surpasses the record during the internet bubble period and is the second largest single liquidity injection since the COVID-19 pandemic.

What's even weirder is the Fed's current operating method—on one hand, injecting money into the market through repurchase and reserve management purchases (RMP), while on the other hand, nominally continuing quantitative tightening (QT). It's like letting air out of a balloon while occasionally blowing a little air back in, as if afraid of letting it out too quickly.