Fed’s Expenses Exceeded Earnings in 2023 as Interest Rates Climbed

The Federal Reserve’s expenses exceeded its earnings in 2023 by $114.3 billion, its largest operating loss ever, forcing the US central bank to forgo remittances to the Treasury as interest rates soared.

The Fed’s interest income earned on its portfolio of assets totaled $163.8 billion last year, compared with $170 billion in 2022, according to preliminary financial statements released Friday. Meanwhile, interest expenses nearly tripled, to $281.1 billion in 2023 from $102.4 billion the previous year, as the Fed jacked up interest rates to fight inflation.