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The Federal Reserve has begun a new round of Treasury bill purchases aimed at keeping bank reserves “ample” and short-term funding markets stable. Officials highlighted the effort as an operational step, not a change in the policy stance. Still, the move arrives as investors focus on liquidity conditions and their impact on risk assets, including cryptocurrencies.
The Federal Reserve said it will purchase about $40 billion of short-dated Treasury bills in the first month under a Reserve Management Purchases program. The New York Fed said the trading desk will publish monthly amounts and a tentative schedule near the ninth business day of each month. The Desk planned the first schedule for December 11, with purchases beginning December 12.
The Federal Open Market Committee tied the plan to reserve levels. In its December 10 statement, it said reserve balances had “declined to ample levels,” and it would buy shorter-term Treasuries as needed to maintain that supply. The implementation note also pointed to Treasury bills and, if required, other Treasuries with maturities of three years or less.
The Fed’s announcement followed the end of its balance-sheet runoff program that began in 2022. Officials acted ahead of year-end because money markets often tighten in December. Analysts also cited pressure from higher non-reserve liabilities and shifts in cash balances that can drain banks' reserves.
Chair Jerome Powell said the central bank focused on rate control rather than stimulus. He described the purchases as “solely” designed to maintain ample reserves over time and to support effective control of the policy rate. That message seeks to separate reserve management from quantitative easing, which policymakers use to ease broader financial conditions.
Liquidity changes can still matter for crypto pricing, even when the Fed calls them technical. When the Fed buys Treasury bills, it adds cash to the banking system and reduces the supply of bills available to private investors. Market commentary has likened the effect to mild easing, as it expands the balance sheet and can improve funding conditions.
CoinMarketCap showed Bitcoin near $90,000 on December 13, with a market cap of around $1.8 trillion and a 24-hour volume of $82 billion. CoinGecko put the total crypto market value near $3.16 trillion, after a decline over the prior 24 hours.
Traders will watch repo rates, reserve levels, and future Fed purchase schedules for signals about USD liquidity. CoinMarketCap data also showed a daily decline near 2%, while ether traded near $3,200. Risk sentiment remains data-dependent. Markets compare flows with rate expectations.
