Fed makes massive year end REPO injection! Liquidity problem or window dressing?

On December 31, 2025, the Federal Reserve made a massive $74.6B securities purchase in the REPO market. This also coincided with mortgage-based securities purchases, treasury securities purchases, a surge in SOFR volume, and an increase in the Fed’s balance sheet. The big question here is this a sign of major market liquidity issues or just year end window dressing? This episode examines various charts from the St. Louis Federal Reserve FRED database.