FINANCIAL TIMES: The US Federal Reserve sent $76.9bn in profits to the Treasury last year, according to the central bank’s preliminary results, showing how the Fed’s unconventional monetary policy has turned it in to the most profitable bank in history.
At more than 3 per cent of federal government revenues and around 0.5 per cent of US gross domestic product, the figure reveals how quantitative easing has had the side effect of generating extraordinary earnings for the Fed…
As part of its efforts to support the economy, the Fed has bought billions of dollars in Treasury securities to drive down long-term interest rates. The Fed earns interest of more than 1 per cent on many of those securities while it pays only 25 basis points to banks on their reserves. The difference allows it to record large profits which it remits to the Treasury… (more)
