Fed's Assets Last Year Total $7.36 Trillion, Up 76.5%

[Image source= EPA Yonhap News]

[Asia Economy Reporter Park Byung-hee] The asset size on the balance sheet of the U.S. central bank, the Federal Reserve (Fed), significantly increased last year, expanding to $7.36 trillion.

According to the Wall Street Journal on the 22nd (local time), the Fed released its annual financial report, showing that the asset size, which was $417 million in 2019, surged by 76.5% last year.

The asset size grew substantially because the Fed purchased large amounts of U.S. Treasury bonds, mortgage-backed securities (MBS), and others last year to stabilize the financial market.

The Fed's interest income last year was $101.54 billion, a 1.2% decrease compared to 2019.

On the other hand, interest expenses significantly decreased from $40.95 billion in 2019 to $8.6 billion last year. Most of the Fed's interest expenses are interest paid on reserve balances that commercial banks deposit with the Fed.

The operating costs of the Fed's Board of Governors, 12 regional Feds, and the Bureau of Consumer Financial Protection (BCFP) amounted to $7.89 billion, a 7.9% increase compared to 2019.

The Fed attributes most of its earnings, excluding operating costs and dividends paid to private banks, to the U.S. Treasury.

Last year, the Fed's earnings attributed to the Treasury totaled $86.89 billion, a 58% increase compared to $54.89 billion in 2019.

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