Posted 1/18/2024, 12:48:00 AM
Federal Reserve Deficit Tops $100 Billion as Rate Hikes Send Interest Costs Soaring
- Interest rate hikes by the Federal Reserve to combat inflation have led it to run over a $100 billion deficit in 2023, adding to the national debt
- Normally the Fed remits excess earnings to the Treasury to pay down debt, but higher rates paid to banks have turned its surplus into losses
- The Fed lost $114.3 billion in 2023 after remitting $79 billion to the Treasury in 2022 before interest rates rose
- Economists link portions of inflation under Biden to high spending policies like the American Rescue Plan and Inflation Reduction Act
- Higher interest rates have also rapidly increased interest payments on the national debt, now over $980 billion compared to $535 billion when Biden took office