2024-01-13 10:44:40
In 2023, the US Federal Reserve recorded the largest operating loss in its 110-year history and was therefore unable to return almost anything to the treasury, as it should do when it makes profits.
The loss amounted to $114.3 billion in 2023, according to preliminary estimates for the 2023 accounts of this institution that carries out the functions of the central bank, and in 2022 it achieved a profit of $58.8 billion.
The loss was linked, on the one hand, to the increase in interest rates that the Federal Reserve used to curb high inflation, as it forced it to pay more money in exchange for bank reserves in addition to the Treasury bonds and mortgage-backed stocks that it held.
The Federal Reserve will thus pay $281.1 billion in interest in 2023, an increase of $178.7 billion over the previous year.
On the other hand, one of the Federal Reserve’s sources of income declined last year, which is the interest it receives from the bonds and stocks it holds.
As his portfolio’s returns deteriorated, he received only $163.8 billion in interest in 2023, $6.2 billion less than the previous year.
In normal times, the Federal Reserve pays the Treasury each week all of its profits after deducting its needs for the costs of operating its headquarters in Washington and the profits paid to its 12 subsidiary banks in the states, which make up the Federal Reserve System.
But when profits are not enough to cover these costs, the Federal Reserve becomes indebted to the Ministry of Economy and Finance and is counted as deferred assets. The Federal Reserve will not resume paying money to the Treasury until it achieves a profit that allows it to cover this amount.
In 2023, he was unable to send more than $670 million to the treasury, and the value of his deferred assets amounted to $116.4 billion, to which $16.6 billion was added from 2022, bringing the total to $133 billion.
In 2022, the Fed was able to pay $76 billion to the Treasury because it made a profit through September.
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