Tuesday, January 12, 2010

The Fed's $45 Billion Profit: Earnings Easily Top JPM, GS, and BAC Combined

The Washington Post today reports that the Fed is set to report $45B profit with its investments. Was it all the trading they do like Goldman sachs?

This would be the highest earnings in the 96-year history of the central bank.

The newspaper reports that the Fed's earnings will easily top that the expected profits of BAC, GS, and JPM combined.

"Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits -- though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply".

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1 comment:

Anonymous said...

First thing that comes to my mind is that the US gov't just moved up a notch to suck money out of hard working citizens. It's now in the game with crooks like GS, JPM, et al.

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