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Fed Piles Up $66 Billion in Paper Losses as It Faces Trump Wrath

  • Mark-to-market losses dwarfed central bank capital at Sept. 30
  • Ex-Fed Governor Warsh warns of possible credibility costs
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Fed Seen Trying to Engineer `Softish Landing' for U.S. Asset Prices

The Federal Reserve is piling up unrealized losses on its $4.1 trillion bond portfolio, raising questions about its finances at a politically dicey moment for the independent central bank.

The Fed had losses of $66.5 billion on its securities holdings on Sept. 30, if it marked them to market, according to its latest quarterly financial report. That dwarfed its $39.1 billion in capital, effectively leaving it with a negative net worth on that basis, a sure sign of financial frailty if it were an ordinary company.