By Michael S. Derby
NEW YORK (REUTERS) – The Federal Reserve has broken this year with its long -standing practice to release an annual preview of his finances for the previous year.
The US Central Bank has released a provisional statement describing its annual profit or loss at the beginning of January since at least 2006, but still has to release the figures before 2024. The provisional statement will be updated later with a final and controlled version.
A spokesperson for the Fed said that the controlled version of the financial statements will be released later this month.
For the vast majority of time, the FED has announced its finances, it has yielded a profit, often a large one. But that changed in 2023, when the independent federal agency swung to a record loss, or “net negative income” as described in its statements. Before 2023, the loss was a record of $ 114.3 billion, after a net positive income of $ 58.8 billion in 2022.
FED officials have long said that the profit situation has no effect on its monetary policy or activities. But some observers feared losing fed for a long time, even if they are powered by a system set up by the congress, can create political friction.
Although that still has to be done in an important way, the push of US President Donald Trump and Tesla CEO Elon Musk’s Department of Government can efficiency to reduce the federal government. Government agencies were confronted with a deadline on Thursday to submit proposals for Widecale reductions in their workforce.
Under the leadership of FED chairman Jerome Powell, the central bank had a loaded relationship with Trump, although it was the Republican president who raised Powell to the role during his first term in the White House.
Peter Conti-Brown, professor of financial regulations at the Wharton School of the University of Pennsylvania, said that a major challenge for the FED “is to manage the demands of political accountability with the fact that those who set those requirements will pay little attention to the independence of the Central Bank.”
“The Fed,” he said, “is subject to a burning and motivated external attack by current advisers for the president who seem to spoil for a fight and it would launch with even small provocation.”
The FED is legally obliged to return any net income to the American treasury after covering the expenses. The central bank mainly earns money from the interest income that is derived from the bonds that the possession purchased as part of its monetary policy and market stabilization work. It is also paid to provide services to the financial sector, although that income flow is overshadowed by the income of the bond.