The Federal Reserve has found a new way to cut the deficit: investing in foreign currencies. The Senate Budget Committee estimates the fiscal 1995 deficit at $165 billion, about $10 billion less than previously forecast. One reason for the drop: The Fed enjoyed a $3.3 billion windfall as the plunging dollar boosted its $20 billion portfolio of foreign currencies. Last winter, the bean counters figured the Fed would lose money on foreign holdings.
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