The true face of the Federal Reserve has been exposed—it may not be as authoritative as you think.

A turning point at the end of last year: on December 1st, it was still shrinking its balance sheet to withdraw liquidity, but just 11 days later, it suddenly changed course, beginning to expand the balance sheet and inject liquidity. Behind this split operation points to a reality—Wall Street's influence has long penetrated the central bank's decision-making level.

JPMorgan's actions best illustrate the issue. When reserve pressures arose, this financial giant aggressively cut its reserve holdings from $409 billion to $63 billion, while heavily buying high-yield U.S. bonds. What was the result? Market liquidity suddenly tightened, and the reserve system approached the critical threshold of $3 trillion. The scene feels familiar—reminiscent of the repo crisis of 2019.

The Federal Reserve is caught in a dilemma: if it doesn't act, the clearing system may break down; if it does, it’s essentially compromising with big banks. Ultimately, Powell restarted QE-style repo operations. History repeats itself, driven by adjustments in the decisions of key participants.

Here’s more sobering data: the Federal Reserve pays nearly $15 billion in interest annually to JPMorgan, a quarter of that bank’s profits. Some lawmakers have bluntly stated—this is essentially bleeding Wall Street. When a bank can influence central bank policy, who is the true controller of the system? This question warrants deep reflection from market participants.