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Odd Lots

It’s Official: The Fed’s in the Red

Bloomberg business news
Fed Should Take a Bit of a Pause: State Street's Heinel

The Federal Reserve is posting its first operating loss in years as interest rates soar and demand for US bonds craters.

Fed data show the central bank reporting earnings remittances due to the US Treasury of negative $2.9 billion as of Oct. 5.

It’s a stark, though not unexpected, turn of events for a central bank which made billions in extra interest income from its expanding balance sheet in the years since the financial crisis. Of course, the Fed isn’t a “normal” investor. It cannot go bankrupt and any operational losses stemming from its vast portfolio of bonds will simply mean it remits less money to the US Treasury.