Fed’s $13.5B Repo Injection Sparks Market Recovery Wave
- The Federal Reserve injected $13.5B into the banking system through overnight repos.
- The move marks the second-largest liquidity boost since COVID, surpassing the Dot-Com peak.
- Crypto markets rebounded as Bitcoin and major altcoins reacted quickly to the liquidity boost.
The Federal Reserve injected $13.5 billion into the banking system as markets watched Jerome Powell speak at Stanford University. The move created the second-largest liquidity boost since the COVID era and surpassed the Dot-Com peak. Market analysts flagged the injection as a rare shift. Traders reacted within hours as major assets recovered from sharp losses earlier in the day.
Fed Adds Major Liquidity Through Large Repo Operations
The Federal Reserve injected $13.5 billion into the banking system through an overnight repo operation, reflecting a noticeable uptick in short-term liquidity support. FRED data shows that from 2021 through most of 2024, overnight repo submissions stayed near zero with only minor, isolated spikes. This trend shifted in 2025. Several injections ranged from $3B to $10B, signaling increased usage of the facility. The sharpest jump appeared on October 31, when it surged to nearly $29B.
The new $13.5 billion surge now stands as the second-largest recorded. It follows a COVID jump, which marked the highest level in the current dataset. Observers connected the timing with increased stress across the banking system. They noted that Powell gave no guidance on rates, inflation, or recession expectations during his Stanford remarks. Even so, markets responded quickly to the liquidity shift.
Crypto Markets Recover After Speech and Liquidity Spike
Traders reacted to the liquidity wave and the lack of new policy comments. Fear began to fade as major assets climbed from earlier losses. Bitcoin rose from $83,909 to $87,157 as buyers returned to the market. The asset posted a 1% gain in 24 hours and reached a $1.73 trillion market cap. Ethereum also climbed, while Solana and other large altcoins gained momentum as volatility eased.
The total crypto market cap touched $2.95 trillion after falling below $2.9 trillion. Traders pointed to the Fed’s actions as the main factor in the rebound. The sudden liquidity injection signaled quiet support for financial markets during a volatile period.
Related: Markets Brace as Hassett Emerges as Crypto-Linked Fed Pick
The shift came at a crucial time for investors. Powell chose not to discuss interest-rate plans, which kept markets guessing about the next policy steps. Yet the repo operations created a strong impression across trading desks.
Analysts now look ahead to the December 9–10 Fed meeting. The meeting will set the tone for the final weeks of the year. The government shutdown left policymakers with limited economic data, and the committee remains divided on future rate cuts.
Reports show up to five FOMC members currently oppose additional easing. However, members of the Fed’s Board of Governors hold the opposite view and continue to support near-term cuts. This split creates uncertainty heading into the final decision.
According to CME Group’s FedWatch, the market points to an 87.2 percent chance of a 25-basis-point cut. They also point to a 12.8 percent chance of no Fed cut. Traders expect strong reactions across crypto and equities once the Fed reveals its final stance.
