The Fed may take a less-noticed action next week—starting from January next year, it will purchase $45 billion in Treasury securities each month. $BTC $ETH

The basis for this prediction from a former New York Fed analyst is that bank reserve levels are approaching a critical point. The repo market has recently experienced frequent rate fluctuations, which is usually an early signal of tightening liquidity. If there’s no preemptive intervention, there could be funding problems at the end of the year.

How will the $45 billion be allocated? Roughly like this: $20 billion will be used to offset regular Treasury maturities and government spending fluctuations, and the remaining $25 billion will serve as a "patch" for the balance sheet reduction that has lasted three years. At the current pace, this purchase plan will likely continue at least until mid-next year.

The timing is quite subtle. Powell’s term is almost up, and no matter who the next chair is, a stable market environment is needed during the transition. Rather than waiting for problems to erupt before firefighting, it’s better to lay a solid liquidity foundation in advance. Technically, this is a shift from quantitative tightening (QT) to a neutral stance; on a deeper level, it could be the prelude to a new round of easing.

The market is now focused on rate cuts. But the impact of balance sheet expansion is, in some ways, more direct than a 25-basis-point rate cut—it changes how much money is in the system as a whole, not just the cost of borrowing.

Where will this new liquidity flow? Will risk assets benefit? For the crypto market, this type of macro shift is usually more worth watching than short-term news headlines. What do you think?