Fed Losses Top $100-B As Interest Costs Rise

The Federal Reserve has reported losses exceeding $100 billion, according to central bank data released.

The losses have arisen due to the Fed paying more in interest costs than it earns from interest on the bonds it holds and the financial services it provides to the banking sector.

These losses have arisen due to the Fed paying more in interest costs than it earns from interest on the bonds it holds and the financial services it provides to the banking sector. While the exact trajectory remains uncertain, some experts anticipate that these losses could potentially double before they begin to diminish.

William English, a former senior Federal Reserve official currently at Yale University, anticipates peak losses of around $200 billion by 2025.

Derek Tang from the forecasting firm LH Meyer suggests that losses will likely range between $150 billion and $200 billion by next year.

To account for these losses, the Fed uses a deferred asset, an accounting method that records future obligations before returning profits to the Treasury. It's worth noting that losses of this magnitude are highly unusual for the Federal Reserve.

WEEKLY FEATURE : Jose Mari Chan And The Christmas Anthem