The Federal Reserve's repurchase agreements may seem like a simple short-term operational tool, but don't be fooled by the surface — they often reflect the true stress in the financial system.

You'll find that when these phenomena start to occur frequently, the repurchase tool is being used on a large scale:

• Banks begin to distrust each other, and the enthusiasm for interbank lending significantly decreases
• The supply of government bonds is too large, and the market's capacity to absorb them cannot keep up
• USD liquidity begins to experience structural tension, which cannot be replenished in the short term

History teaches us a harsh truth: behind every large-scale expansion of repurchase agreements, the market is desperately testing the "edge of imbalance."

Therefore, repurchase is not an easing policy, but it often serves as a prelude to easing. From another perspective: when the repurchase tool is activated, it is usually not the start of a market rescue, but a signal saying "Hey, there's a problem here." When this warning light turns on, smart investors should be alert.