Miércoles, 14 Noviembre, 2018

Fed payments to Treasury fell in 2017 due to interest rate hikes

New York Fed President William Dudley takes part in a panel convened to speak about the health of the U.S. economy in New York Fed payments to Treasury fell in 2017 due to interest rate hikes
Frascuelo Febo | Enero 13, 2018, 13:08

U.S. Federal Reserve said on Wednesday that its remittances to U.S. Treasury Department are expected to continue to decline in 2017 due to increases in interest payments to commercial banks.

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.

The Fed is expected to pay about 80.2 billion U.S. dollars to the Treasury in 2017, down from the 91.5 billion dollars in 2016, and falling for a second year in a row, according to preliminary estimates by the Fed. Higher interest payments to member banks accounted for much of the drop.

The argument in favor of rate rises "remains strong", he said.

As the central bank of the United States, the Federal Reserve conducts open market operations with an eye toward stabilizing prices and maintaining full employment.

The Fed also purchased large volumes of mortgage-backed securities, government-sponsored-enterprise debt securities and Treasuries in order to stabilize the financial system, which caused the Fed's balance sheet to swell from $869 billion in August 2007 to a high of over $4.5 trillion in January 2015.