Bloomberg News

Fed Returns $46.4 Billion to Treasury as Value of Assets Rise

August 27, 2012

The Federal Reserve paid the Treasury $46.4 billion during the first six months of 2012, a 15 percent increase from $40.5 billion in the same period last year.

The Fed disclosed the payments to the Treasury in a new quarterly release of the central bank’s financial reports released today in Washington. The data was previously disclosed on an annual basis when the Fed released its audited financial statements.

The new unaudited quarterly reports are aimed at providing “greater transparency by communicating financial information on a more frequent basis and in greater detail,” the Fed said in a statement.

The central bank earns income through its $2.58 trillion portfolio of securities and other assets on a balance sheet that totaled $2.83 trillion as of Aug. 22. Assets such as Treasury securities and mortgage-backed securities, mostly acquired through two rounds of large-scale asset purchases, known as QE, pay interest to the Fed. The Fed pays its operating expenses from these funds and remits most of what’s left over to the Treasury.

Through June 30 of this year, the Fed has earned $42.7 billion in interest income from its portfolio of assets. The central bank’s holdings of Treasuries increased in value by $5.5 billion. The Fed system’s operating expenses, which include Fed funding for the Bureau of Consumer Financial Protection and the Office of Financial Research, totaled $2.79 billion, up from $2.56 billion during the same period of time in 2011.

To contact the reporter on this story: Joshua Zumbrun in Washington at

To contact the editor responsible for this story: Chris Wellisz at

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