According to audited financial reports published on March 26, expenses exceeding revenues caused the US Federal Reserve (Fed) to have an operating loss of 3 billion USD in 114,3, an unprecedented loss. , forcing the Fed to stop transferring profits to the US Treasury while interest rates remain high.
The Fed's interest expenses increase nearly threefold to $281,1 billion in 2023. Meanwhile, interest income in the asset portfolio totaled $163,8 billion, compared to nearly $170 billion for the Fed. 2022.
After deducting daily operating expenses, the Fed is forced to transfer the proceeds to the Ministry of Finance to cover the Federal budget deficit.
As expenses outpace revenues starting in late 2022, the Fed issues debt certificates, or “deferred assets,” to the Treasury Department. The value of these "deferred assets" increases by 116,7 billion USD, to a record level of 133,3 billion USD in 2023.
The Fed earns revenue from the securities in its portfolio and pays interest on the reserves that banks deposit at the Fed. This brings a large source of revenue and a large contribution to the Ministry of Finance when interest rates are near 0%. However, the situation changed when the Fed started raising interest rates in March 3.
Interest payments on banks' excess reserves deposited with the Fed hit a record $176,8 billion in 2023, nearly triple what they were in 2022.
Most of the Fed's regional banks began to stop transferring profits to the Treasury Department in September 9.
According to VNA
