The Fed's losses are projected to reach a record $114.3 billion in 2023.

According to audited financial reports released on March 26, expenses exceeding revenue caused the US Federal Reserve (Fed) to incur an operating loss of $114.3 billion in 2023, an unprecedented loss, forcing the Fed to stop transferring profits to the US Treasury Department while interest rates remain high.

The Fed's interest expense nearly tripled to $281.1 billion in 2023. Meanwhile, interest income from its asset portfolio totaled $163.8 billion, compared to nearly $170 billion in 2022.

After deducting daily operating expenses, the Fed is forced to transfer the proceeds to the Treasury Department to cover the federal budget deficit.

Because expenses exceeded revenue since the end of 2022, the Fed issued debt certificates, or "deferred assets," to the Treasury. The value of these "deferred assets" increased by $116.7 billion, reaching a record high of $133.3 billion in 2023.

The Fed earns revenue from securities in its portfolio and pays interest on the reserves that banks deposit with the Fed. This provides a significant source of revenue and a substantial contribution to the Treasury Department when interest rates are near 0%. However, this situation changed when the Fed began raising interest rates in March 2022.

Interest payments on excess reserves held by banks at the Fed reached a record $176.8 billion in 2023, nearly three times the amount paid in 2022.

Most of the Fed's regional banks began to stop transferring profits to the Treasury Department in September 2022.

According to VNA

Source: https://doanhnghiepvn.vn/quoc-te/khoan-lo-cua-fed-tang-len-muc-ky-luc-114-3-ty-usd-vao-nam-2023/20240328101822040