Why the Fed is losing billions every week & its implications

The US Federal Reserve is losing billions of dollars every week. Yes, you read that right. BILLIONS. How did the Fed get into this position, and what does it mean for the future of monetary policy and the United States (US) at large?

UPDATE - whilst not clearly explained by the Fed, please note that the Fed’s weekly remittances data has turned cumulative once the Fed began to generate operating losses - the below chart shows weekly remittances adjusted to reflect the change in the cumulative negative number.

The era of QE

In order to answer these questions, we first need to jump back in time to the GFC. It was here that the Fed implemented the first round of its Quantitative Easing (QE) program. QE1 as it became to be known (so as to distinguish from the Fed’s later, but separate QE programs), was launched on 25 November 2008. The program was later expanded from its initial $600bn starting point, and spawned several follow-up QE programs. The result of these programs was a massive increa…