Economic Crisis Fixes Net Fed $45B Profit (A record)

[lynnf]

http://www.cbsnews.com/stories/2010/01/12/politics/washingtonpost/main6086028.shtml

Economic Crisis Fixes Net Fed $45B Profit


Wall Street firms aren't the only banks that had a banner year. The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall for the government.

The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.

[MelissaWV]

I just read this, yep.


The central bank announced Tuesday it logged a record windfall of $52.1 billion. Of that total, a record of $46.1 billion gets turned over to the Treasury Department.


Under one program that ended last year, the Fed snapped up $300 billion worth of government debt. Under another program, the Fed is on track to buy $1.25 trillion in mortgage securities from Fannie Mae and Freddie Mac, and an additional $175 billion in debt issued by the mortgage giants. Those programs have boosted the value of securities held by the Fed.

The Fed faces a risk, however. The Fed could lose money if the central bank had to sell those securities and their prices were to fall. The Fed might need to sell the securities to sop up some of the unprecendented amount of money pumped into the economy during the crisis.

The Fed is funded from the interest earned on it vast portfolio of securities. It is not funded by Congress.

After covering its expenses, the Fed gives what is left over to the Treasury Department.

Interestingly, the article I read was on the front page of Yahoo. From there, a "related article" linked at the bottom is this:

http://seekingalpha.com/article/181774-fed-to-people-it-s-not-our-fault?source=yahoo

Fed to People: It's Not Our Fault
Contributor: Peter Schiff :D