Fed Raises Liquidity Concerns, Considers $220 Billion Treasury Purchases
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 02 2026- Liquidity Risk Intensification: The December FOMC minutes reveal officials' concerns about reserves nearing the lower bound of 'ample,' which could expose short-term funding markets to shocks and impact financial stability.
- Treasury Purchase Plan: To address liquidity pressures, officials discussed purchasing approximately $220 billion in short-term Treasury securities over the next year to maintain ample reserves, thereby supporting interest rate control and smooth market functioning.
- Repo Facility Optimization: The Fed is considering enhancing the effectiveness of its standing repo facility by removing usage caps, enabling market participants to view it as a routine part of operations, which would bolster liquidity support capabilities.
- Stable Rate Expectations: While the market largely anticipates rates to remain in the 3.50%-3.75% range at the January 2026 meeting, liquidity management has emerged as a critical priority for the Fed, potentially influencing future monetary policy directions.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
