A repurchase agreement plan is set to deliver a shock to the financial world.

The Federal Reserve strikes again. A 25 basis point rate cut, $40 billion in bond purchases, and the removal of repurchase limit caps—this combination marks the arrival of the "hidden QE" era. Wall Street immediately erupts: the Dow surges nearly 500 points, gold jumps to $4,227, and Bitcoin reclaims over $93,000.

But this is not just a celebration in the capital markets. Everyone’s wallets are being reshuffled in this currency game.

**What exactly is a repurchase agreement?**

It sounds complicated, but it’s actually simple—financial institutions sell high-quality assets like U.S. Treasuries to the Federal Reserve in exchange for cash, agreeing to buy them back later at a slightly higher price. The difference is the implied interest rate.

This is completely different from traditional QE. Conventional QE involves long-term asset and liability expansion, while repurchase agreements were originally just short-term liquidity supplements.

But now? With $40 billion in bond purchases and unlimited repurchase operations, it has long exceeded the traditional repurchase framework. To put it plainly, this is QE in disguise.

**Why is the Federal Reserve doing this?**

The root cause is this: since shrinking its balance sheet, the Fed has reduced its assets by $2.4 trillion. Bank system reserves have shifted from "ample" to "scarce," and overnight repo rates frequently break through the policy rate ceiling.

The real goal of this magic trick by the Fed is to solve the liquidity crunch in the banking system. Don’t be fooled by the name change; fundamentally, it’s still flooding the market with liquidity.

What does this mean for you and me? Easing expectations are heating up, and risk assets are getting a breather. Bitcoin, gold, and stocks are all regaining vitality amid this policy wave.