Title:

Why Is the Federal Reserve Operating at a Loss?

Why Is the Federal Reserve Operating at a Loss?

DATE: January 23, 2023

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ABSTRACT: The Federal Reserve (Fed) is self-funded and normally earns more income than needed to cover its expenses and capital transfers, remitting the difference to Treasury. For 2022, the Fed remitted $76 billion. However, since September 2022, the Fed's expenses exceeded its income by $18.8 billion, causing remittances to temporarily cease. Depending on future interest rates, net income could remain negative for the next couple of years, and remittances could cease for longer. This Insight explains why this occurred and what it means for policy.

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Labonte, Marc and Library of Congress. Congressional Research Service. Why Is the Federal Reserve Operating at a Loss? , Congressional Research Service, Library of Congress, January 23, 2023, https://fraser.stlouisfed.org/title/6956, accessed on June 25, 2024.

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NOTE: Congressional Research Service report #IN12081

PUBLISHER: Congressional Research Service, Library of Congress

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