Fed Injecting Billions into Banking System, Boosting Riskier Assets

On October 31st, the US Federal Reserve injected $29.4 billion into the financial system through the Standing Repo Facility (SRF), its primary tool for liquidity management. This massive move aimed to alleviate temporary tightness in short-term funding markets and provide breathing room for banks. Market analysts view this action as a positive signal for riskier assets, but experts emphasize it’s not a full-fledged quantitative easing initiative. 2023 has seen the Fed actively work to unwind its balance sheet. This move is viewed more as a short-term liquidity adjustment.