The Federal Reserve is losing over $1 billion every week and you're on the hook.
Since September 2022, the central bank has reported losses of around $176.4 billion. If it was a real company, it would be considered bankrupt.
Fortunately for the Fed, it gets to make up its own accounting rules. Unfortunately for you the taxpayer, you're going to pay for the central bank's losses.
Why is the Fed losing so much money?
It's a function of interest rates.
Since the Fed hiked rates to battle price inflation, it has been paying commercial banks more for the reserves it holds on their behalf. Meanwhile, earnings on the assets held on its balance sheets have decreased.
Wall Street on Parade reported that commercial banks have been earning 5.4 percent on their reserves at the Fed for nearly a year.
The Federal Reserve Is Bleeding Red Ink and You're on the Hook