Federal Reserve allegedly pumped $29.4B into US banking system. That's not the actual total

People on social media were quick to notice an unusually high amount of repo transactions from the Federal Reserve on Oct. 31, 2025.

Published Nov. 6, 2025

Image courtesy of Getty Images

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Claim:

The Federal Reserve pumped $29.4 billion into the U.S. banking system overnight in October 2025.

What’s True

The Federal Reserve actually injected banks with more than $50 billion in repo agreements on Oct. 31, 2025, which social media users correctly identified as an anomaly compared with the last five years.

What’s False

However, the Federal Reserve also sold about the same amount in reverse repo agreements that same day, meaning it also took about $50 billion from banks at the same time. These agreements are essentially overnight loans, and therefore get paid back with interest the following business day.

In November 2025, some people on social media began posting screenshots of a chart from the Federal Reserve that they claimed was cause for alarm. The Fed, the posts claimed, pumped $29.4 billion into the U.S. banking system overnight on Oct. 31, 2025, a level the posts claimed surpassed the peak of the dot-com bubble in the early 2000s.

One X post (archived), which used a screenshot of the chart as evidence, was viewed millions of times in the next couple of days. Similar posts were widely seen and shared on Facebook (archived), Reddit (archived) and Threads (archived).

While it is true that the Federal Reserve injected at least $29 billion into the U.S. banking system overnight on Oct. 31, that wasn’t the total amount. The actual amount injected was $50 billion, through short-term transactions called repo agreements that are paid back the following business day. The same day, the Fed also took $50 billion out of the banking system in reverse transactions. For this reason, we’ve rated this claim a mixture of true and false information.

What are repo agreements?

The kinds of transactions highlighted in the posts are called repo agreements. As the Federal Reserve Bank of New York describes it, an overnight repo transaction is when the Fed purchases securities from another party with an agreement to resell those securities the next business day. Each repo transaction is economically similar to a loan collateralized by securities, according to the Fed. 

A reverse repo transaction does the opposite — the other party purchases securities from the Federal Reserve and the Fed buys those securities back the next business day. Repo agreements also can be made between private banks without the Fed’s participation or assets and with different lengths of time before repayment.

Because the Federal Reserve gives money to the bank when it buys its security in a repo agreement, it essentially infuses the bank with cash until the following business day, when the Fed sells back the security. When the Fed sells a security to the bank in a reverse repo agreement, it’s taking cash from the bank for that business day in exchange for the interest the Fed pays the bank when it buys back the security.

Therefore the Federal Reserve can use repo operations to ensure the smooth functioning of short-term funding markets by temporarily increasing available cash in the U.S. banking system through repo agreements or temporarily reducing cash in the system through reverse repo agreements, according to BlackRock Cash Management.

Federal Reserve’s Oct. 31 repo operations

The chart screenshotted in many of the posts was the Federal Reserve Bank of St. Louis’ graph of Treasury securities purchased by the Federal Reserve in overnight repo agreements. If you hover over Oct. 31, 2025, on that graph, you can see that the Federal Reserve purchased $29.4 billion of these securities in overnight repo agreements that day. That number stands out as far higher than any other over the past five years, which is the timeframe the graph defaults to.

If you expand it to 10 years, however, you’ll see that the Federal Reserve made far more purchases of Treasury securities in overnight repo agreements in 2019, when a technical glitch disrupted the private repo market and spurred the Federal Reserve into action, and in 2020, when the COVID-19 pandemic again upset the short-term funding market.

But Treasury securities aren’t the only securities the Federal Reserve buys and sells on the repo market. Its page for recent repo operations shows that the Fed also deals in agency securities and mortgage-backed securities. Between its two daily operations and three different securities, the Federal Reserve actually gave the banking system a temporary injection of $50.35 billion on Oct. 31.

The Federal Reserve isn’t just participating in the overnight repo market every day; it’s also conducting overnight reverse repo operations each day. On Oct. 31, the Federal Reserve sold $51.80 billion in its operations that day.

Therefore, between its repo agreements and reverse repo agreements, the Federal Reserve actually took $1.45 billion out of the short-term market that day.

How it compared to past operations

The data available from the Federal Reserve Bank of St. Louis show that total securities purchased by the Fed through overnight repo agreements follow the same trends as Treasury security purchases: The operation was the biggest since 2020, but smaller than operations from 2019 and 2020. When traced back to 2000, this operation was larger than any other overnight repo operation outside of 2019 and 2020.

Its reverse repo operation on Oct. 31 — which, again, took more money out of the system than that day’s repo operation put into the system — was actually small compared to most of the reverse repo operations from the past five years. During a period between 2022 and 2023, the Federal Reserve regularly bought more than $2 trillion in securities through overnight reverse repo agreements, according to Federal Reserve Bank of St. Louis data.

Prior to 2021, that $51.80 billion was significant for a reverse repo operation. Although the Federal Reserve regularly passed that number in operations between 2013 and 2020, it wasn’t until 2021 that these operations started to balloon into the trillions.

In 2021, following the scares in 2019 and 2020, the Federal Reserve became more active in the short-term funding market. That year, it established the Standing Repurchase Agreement (repo) Facility to serve as a backstop in money markets and support smooth market functioning. It has seen little use since its creation — something Lorie Logan, president of the Federal Reserve Bank of Dallas, expressed disappointment over on Oct. 31, the same day as the major jump in repo agreements — making the $50.35 billion in repo agreements on Oct. 31 a record since the Fed established it.

Meanwhile, in 2022 the Federal Reserve’s balance sheet peaked at nearly $9 trillion in assets and the interest rates it paid on reverse repos became higher than the yields on the securities it held, according to a Congressional Research Service report. By letting its securities mature and roll off the balance sheet and these reverse repos, the Federal Reserve has gradually reduced its balance sheet to about $6.6 trillion in assets.

In Logan’s Oct. 31 speech at a banking conference, she said the Federal Reserve will stop trying to reduce its assets as of Dec. 1.

What does this mean?

The Federal Reserve injecting money into short-term markets through repo agreements isn’t necessarily a sign of looming crisis. In fact, Logan encouraged banks to use the Standing Repurchase Agreement Facility and thus take these cash infusions through repo agreements more often.

Emery Winter is based in Charlotte, North Carolina, and previously worked for TEGNA’S VERIFY national fact-checking team. They enjoy sports and video games.