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MNI BRIEF: Fed Asset Portfolio Running Deepening Losses

(MNI) Washington
(MNI) Washington
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Rising U.S. interest rates mean the Federal Reserve is running unrealized losses on its portfolio this year and those losses are expected to deepen, the New York Fed said in a report published Tuesday.

The net income of the Fed's portfolio is expected to "decline notably" through 2024 as maturing assets run off the balance sheet but could vary widely depending on the path of market rates, the NY Fed said. If interest rates were to rise 200 bps higher than indicated in the March surveys, the net portfolio income would be negative for roughly two to three years.

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Rising U.S. interest rates mean the Federal Reserve is running unrealized losses on its portfolio this year and those losses are expected to deepen, the New York Fed said in a report published Tuesday.

The net income of the Fed's portfolio is expected to "decline notably" through 2024 as maturing assets run off the balance sheet but could vary widely depending on the path of market rates, the NY Fed said. If interest rates were to rise 200 bps higher than indicated in the March surveys, the net portfolio income would be negative for roughly two to three years.

Keep reading...Show less