Federal Reserve cuts Treasury bill purchases to $25B per month, signaling faster liquidity wind-down

The Federal Reserve announced on April 13 that it will purchase roughly $25 billion in Treasury bills each month, a sharper reduction than markets anticipated from the reserve management purchases (RMP) program launched in December 2025.

The program originally started at approximately $40 billion per month. Cutting that by more than a third caught analysts off guard, most of whom had expected a gentler tapering schedule designed to keep bank reserves comfortably above what the Fed considers “ample” levels.

What the RMP program actually does

The RMP program was launched after quantitative tightening officially ended on December 1, 2025, following significant balance sheet reduction since 2022. By buying short-term Treasury bills, the Fed adds reserves back into the banking system, preventing the kind of overnight funding crunches that spooked markets in September 2019.

The New York Fed’s Open Market Trading Desk executes these purchases as part of the central bank’s ample-reserves framework. Alongside the $25 billion in new purchases, the Fed is also conducting roughly $15.5 billion in reinvestments monthly.

By June 2026, the purchasing pace is set to drop even further, to just $10 billion per month through July 13.

Why crypto markets are paying attention

When the Fed buys Treasury bills, it effectively injects cash into the financial system, lowers short-term yields, and loosens financial conditions. When the Fed was aggressively tightening in 2022 and 2023, crypto markets cratered. As tightening wound down and liquidity conditions stabilized, risk assets recovered.

The stablecoin connection

Stablecoin issuers, particularly Tether, hold enormous quantities of Treasury bills as backing for their tokens. Projections suggest stablecoin-driven demand could channel between $800 billion and $1 trillion into new Treasury bill purchases by 2028, which would make stablecoin issuers collectively one of the largest categories of T-bill buyers in the world.

What this means for investors

The trajectory from $40 billion to $25 billion to $10 billion by mid-summer suggests the Fed is comfortable with where reserves are landing. The Fed is still buying, just buying less — a meaningful distinction from actively shrinking the balance sheet.

Watch the overnight repo rates and the Secured Overnight Financing Rate (SOFR) for early warning signs. If those start creeping up meaningfully above the Fed’s target range, the $10 billion monthly pace scheduled for this summer may not survive contact with reality.

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