Fed’s Operating Losses Swelled to Record $114.3 Billion in 2023

The Federal Reserve’s expenses exceeded its earnings in 2023 by $114.3 billion, its largest operating loss ever, forcing the US central bank to forgo remittances to the Treasury as interest rates remain elevated.

Interest expenses, which includes reserves balances at the Fed’s reverse repo operations, nearly tripled to a $281.1 billion in 2023, according to audited financial statements released Tuesday. Meanwhile, the Fed’s interest income earned on its portfolio of assets totaled $163.8 billion last year, compared with roughly $170 billion in 2022.