How Big Are The Fed's Losses And Where Can We Go See Them?

Summary

• A liability is money that the Fed owes some other entity - in this case, money that the Fed owes the US Treasury Department.
• if the average combined balances in 2023 of reserves and overnight RRPs is $4.5 trillion, and if the Fed pays an average of 5% on these balances, it will shell out $225 billion in interest.
• The Fed won’t print money to pay for its losses - it won’t need to.

CHUYN

A collapse chart has been making the rounds in the social media, financial blogs, and the like. It’s being handed around without context, as if self-explanatory, sort of like, look, the world is collapsing. It’s from the St. Louis Fed’s data depository. The title of the chart says, among