Fed is currently losing a lot of money 📉
No, this is not a price chart of some meme coin, it's not a stock price of some bankrupt company either, this chart shows losses of the Federal Reserve.
The central bank (Fed) manages interest rates, fights inflation, promotes employment, and can make money doing it. The Fed is losing money right now after a long period in which it was making money.
💰 How does the Fed make money? Fed is buying tons of bonds and mortgage-backed securities that pay interest and on average over time, it makes a fair amount of profit that Fed then hands right on over to the Treasury.
But the Fed also has to spend money. The Fed is a bank for banks, and it pays interest on reserves to those banks, which is around 5.4% right now. The interest expense is now greater than the interest income and the Fed has lost more than $130 billion since last fall 📊
