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JAN 27, 2013 - Business Insider

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A New Federal Reserve Report Quantifies The Risks It's Taking In A Very Scary Way

The Federal Reserve makes a ton of money on its $3T horde of government bonds. In 2012 the Fed earned a tidy $90B by borrowing short and lending long. That income number is the difference between interest income and expense. The P/L does not reflect the fact that the Fed as a huge unrealized gain in its portfolio (The Fed takes capital gains and losses only when securities are sold). According to a recent Fed report, the Fed is sitting on unrealized gains that are in the neighborhood of $200B. This chart shows how big the Fed’s contributions to Treasury have been over the past few ... Read More

Tags: A New Federal Reserve Report Quantifies The Risks It's Taking In A Very Scary Way,  Interest Rates Latest News