The Fed disclosed in its audited annual financial report today that its results in 2025 were less atrocious than in 2024, which had been less atrocious than peak-atrociousness in 2023 when the hangover from its prior monetary policies of ultra-low interest rates and QE had set in.
This is the consolidated report of the Federal Reserve System consisting of the Federal Reserve Board of Governors – a self-funded federal agency whose governors and chair are nominated by the President and confirmed by the Senate – and the 12 regional Federal Reserve Banks, such as the New York Fed, the San Francisco Fed, the Boston Fed, the Dallas Fed, etc., which are private companies whose shares are held by the largest financial institutions in their districts. Thefinancial reportwas audited by KPMG.
Today, the Fed disclosed two types of losses:
What happens to the income and losses: The Fed creates its own money and therefore cannot become insolvent. But these losses matter to the Treasury Department – and the taxpayer.
The Fed has to remit nearly all of its operating income to the Treasury Department (similar to a 100% income tax). From 2008 through September 2022, the Fed remitted $1.36 trillion (blue columns in the chart above). At Treasury, these funds became part of the tax receipts. Those remittances stopped with operating losses in September 2022.
The Fed’s income:
The Fed’s interest expenses: $167.4 billion, of which:
The interest rate that the Fed pays on reserve balances and the interest rate that the Fed pays ON RRPs are part of the Fed’s five policy rates, respectively3.65% and 3.50% since the last rate cut in December.
The Fed started hiking its policy rates in March 2022, and on a quarterly basis started booking operating losses in Q4 2022, after years of huge gains. And these rate hikes continued through mid-2023, so its interest expenses ballooned with the rate hikes. In September 2024, the Fed started cutting its interest rates, and its interest expenses be
সূত্র: Wolf Street
ক্যাটাগরি: জাতীয়