FX.co ★ Fed annual profit shrinks in 2016

The last leap year was full of challenges. Almost everyone faced some difficulties including the financial ones. Not only ordinary people were short of money, but even the biggest financial institutions had a hard time. The Federal Reserve was no exception.

According to official reports, the Fed allocated revenues worth $92 billion to the US Treasury in 2016. This amount decreased drastically versus the figure in 2015 which was nearly $98 billion. At the same time, experts say that this result is not so bad. Though the sum transferred to the budget shrank, it is three times more than it had been before the quantitative easing program was launched. Moreover, the Federal Reserve accumulated the record sum of $4 trillion during the period of this program. The central bank uses its revenue to conduct operations. Spending of the Fed increased to $709 million comparing to the number of $705 million in 2015. The profit dwindled due to a fall in yields of US Treasuries and mortgage securities in 2015. Besides, the Fed paid more interest on excess reserves of the commercial banks which park their funds at the 12 regional institutions. Banks must comply with the reserve requirements, but they are allowed to deposit more if they wish.