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Wednesday, January 11, 2017

Fed Pays $92 Billion to Treasury

The Federal Reserve System paid $92 billion out of its annual net income to the U.S. Treasury in 2016, according to recently released figures. The payments dipped slightly from previous years, falling from $97.7 billion in 2015 and $96.9 billion in 2014, but still nearly triple the sums contributed in the mid to late 2000s.

The Federal Reserve Banks’ net income in 2016 was estimated at $92.7 billion; Treasury payments are calculated after the costs of operations, dividends and other expenses. Fed bank income comes mostly from interest on securities purchased through the system’s open market operations as part of its monetary easing policy. Net income fell by $7.6 billion from 2015 due to the composition of securities held and an increase in the interest that the Fed banks pay on reserve balances held by banks and credit unions.

The regional Fed banks had net operating expenses of $4 billion in 2016, and the Fed system also paid $701 million to produce and retire currency, $709 million to fund the Federal Reserve Board of Governors and $596 million for the operations of the CFPB. Dividend payments fell by nearly $1 billion from 2014 following congressional action to cut dividends paid on Fed bank stock held by member banks with more than $10 billion in assets.

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