Federal Reserve pays $77 billion to Treasury

@CNNMoney January 10, 2012: 1:51 PM ET
chart-federal-reserve-treasury-payments.top.gif

NEW YORK (CNNMoney) -- Ben Bernanke is about to hand Timothy Geithner a very large check.

The Federal Reserve announced Tuesday that it plans to pay the Treasury $76.9 billion, the bulk of the Fed's 2011 income after accounting for its own operating expenses.

Each year after paying its own bills, the central bank hands over all its remaining earnings to the Treasury, as per Fed policy. Most of the money is derived from interest earned on holdings like Treasury bonds and other debt.

The payments have ballooned in recent years as the Fed has earned huge profits from the large bond portfolio it amassed during the financial crisis. The Treasury payment topped out at $79.3 billion in 2010 and remains at historically high levels.

The Fed started stockpiling Treasuries, mortgage-backed securities and agency debt in 2008, in programs known as quantitative easing and QE2. As a result, the central bank now holds a massive $2.9 trillion on its books. The goal was for the asset purchases to bring down interest rates, stimulating more lending and borrowing in the U.S. economy.

The Fed ended 2011 with $78.9 billion in profit, mainly from interest it earned on those securities, as well as some income from foreign currency gains, the sale of services and the sale of some U.S. Treasuries.

The central bank, which is not funded by taxpayer dollars, had operating expenses of $3.4 billion.

It was also assessed $1.4 billion to fund new currency, Federal Reserve Board expenditures and the creation of both the Consumer Financial Protection Bureau and the Office of Financial Research, as required by Dodd-Frank legislation. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.