Don't panic, the Federal Reserve has started injecting liquidity. On December 1, the overnight repurchase was $13.5 billion, second only to the pandemic in 2020, surpassing the internet bubble in 2000!

🧐 Let's explain what "overnight repurchase" is?

In simple terms, it's a type of "short-term borrowing" between the Federal Reserve and banks.

Bank: Boss, I'm short on cash, can you lend me some money? I'll pay you back tomorrow! I'll use government bonds as collateral.

Federal Reserve: Alright, I'll give you $13.5 billion (this time), and charge you a little interest. Tomorrow, you pay me back the principal + interest, and take the government bonds.

This is called "overnight repurchase." For banks, it's a quick fix; for the Federal Reserve, it's a tool to inject liquidity into the market.

📝 In the short term, this is good news for the market!

Liquidity is back → Banks have money to lend or invest → The market is not short on cash → The stock market, bond market, and cryptocurrency could all be pushed higher.

The Federal Reserve's action indicates that it is "keeping a close watch" and will not allow major issues in the market, providing everyone with peace of mind. During times of panic, it's time to buy the dip! 🧐

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