The Fed's repurchase agreement plan is its core tool for adjusting short-term liquidity. In operation, the Fed agrees with financial institutions to first purchase the government bonds and other securities they hold (reverse repo) to release funds and then sell them back at maturity; reverse repos absorb excess liquidity in the opposite direction. By flexibly managing funds, it accurately adjusts the federal funds interest rate and stabilizes the money market. For instance, during the pandemic, it was used on a large scale to effectively alleviate the short-term financing pressure on institutions, ensuring the smooth operation of the financial system and strengthening the efficiency of monetary policy transmission.