Preventing a US recession is not the only problem that the Fed has, it is also losing a lot of money; that's a big concern
Why is the US Fed losing money steadily?
With the latest rate cut introduced by the Fed Reserve, there are chances that America's central bank could be losing out on a lot of money that would have been otherwise beneficial for the overall US economy. However, looking at the current scenario, the reserve banks’ collective losses are closing in on $200 billion, according to The Barron's report. Interestingly, all these losses have comin in within this year as well as the last year, something that is indeed a peculiar issue.
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Was the US Fed profitable earlier?
According to the trends last seen in 2022, the Fed remained profitable by a huge scale even after issuing standard rate cuts during the pandemic emergency situation. Moreover, they reportedly make money out of thin air and invest it wisely in profitable and interest-friendly investment, that help in keeping the banks running properly, and still make good amount of residual wealth.
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