As long as interest rates remain above 3.5%, the Fed is expected to continue to post losses.

(Reuters)

[Financial Channel/Comprehensive Report] The US Federal Reserve said on Friday (24th) that revenue in 2022 will be US$58.8 billion (TWD 1.7 trillion), far below the US$107.9 billion (TWD 3.23 trillion) in 2021.

As interest rates rise, interest rates increase pressure on the amount the Fed keeps in deposit banks.

Beginning last September, payment payments have outpaced the Fed's income from its portfolio, which consists mostly of U.S. Treasuries and mortgage-backed securities.

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By law, the Fed must send the proceeds to the U.S. Treasury after accounting for operating expenses.

The Fed shifted $76 billion in weekly benefits to the Treasury until last September, when costs began to outweigh benefits, and the authorities created a deferral account.

The deferral account, which held $16.6 billion at the end of last year, will allow the Fed to keep paying its obligations as long as costs outweigh benefits.

Once the benefits again exceed the costs, the central bank will pay off the accounts before resuming transfers to the U.S. Treasury.

The Fed is expected to continue to post losses as long as interest rates stay above 3.5 percent and it shrinks the portfolio of assets it has acquired to fuel economic growth over the past 14 years.

On Wednesday, the U.S. raised interest rates to a range between 4.75% and 5%.

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