UBS: Fed May Buy ~$40B/month of Short-Term Treasuries in Early 2026
UBS analysts expect the Federal Reserve to resume modest monthly purchases of short-term U.S. Treasuries — roughly $40 billion per month — in early 2026. The projection signals a possible Fed shift toward providing additional liquidity in the short-term government debt market. UBS framed the estimate as a market expectation, not investment advice. The note may influence expectations for U.S. Treasury bill yields, dollar liquidity and short-end rates, which in turn can affect risk assets including cryptocurrencies.
Neutral
UBS’s projection that the Fed may buy about $40 billion per month of short-term Treasuries in early 2026 is likely to have a mixed, ultimately neutral effect on crypto markets. Direct impact: increased purchases of T-bills would add short-term dollar liquidity and could put modest downward pressure on short-term yields, encouraging some risk-on flows into assets like equities and crypto. Indirect/offsetting factors: the scale ($40B/month) is relatively small relative to the overall Treasury market and broader macro drivers (growth, inflation, Fed policy stance) will dominate crypto price action. Historical parallels: past Fed liquidity operations (e.g., temporary bill purchases, RRP adjustments) have sometimes supported risk assets briefly but rarely produced sustained crypto rallies without complementary easing (rate cuts or broader QE). Short-term traders might see slight bullish sentiment around risk assets and tighter funding markets; longer-term effects depend on whether this signals a durable shift toward easier liquidity or remains a targeted, limited intervention. Overall, expect limited immediate volatility from this specific report but monitor Treasury bill yields, dollar strength, and Fed communication for larger directional cues.