Fed Pays $80.2 Billion to Treasury

Galtero Lara
Enero 13, 2018

The US Federal Reserve administration has announced it will pay a little smaller dividend to the Treasury in 2017 than in 2016, due to the rise in interest rates.

The US Federal Reserve payments are down for a second consecutive year, although they remain three times higher than before 2008, when the central bank began the large-scale bonds purchasing.

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The Federal Reserve Banks' net income in 2017 was estimated at $80.7 billion; Treasury payments are calculated after the costs of operations, dividends and other expenses. Net income fell by $11.7 billion from 2016 due primarily to an increase in the interest that the Fed banks pay on reserve balances held by banks and credit unions.

Those payments were offset by a $2.5 billion increase in interest payments the Fed received on its securities in portfolio because of higher interest rates. That means buying and selling securities in order to set a baseline federal interest rate, which had been set at nearly zero after the financial crisis and did not rise again until December 2015. One side effect of the Fed's larger balance sheet is that interest on assets it holds have gone up as well, from $31.7 billion in 2008 to a high of nearly $100 billion in 2015.

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