U.S. Fed's remittances to Treasury Department drop for 4th consecutive year

Source: Xinhua | 2020-01-12

Data released by the U.S. Federal Reserve (Fed) on Friday showed that the central bank's payments to the U.S. Treasury declined for the fourth consecutive year as its expenses increased and income dropped.

Fed provided around 54.9 billion U.S. dollars to the Treasury Department in 2019, according to the central bank's preliminary estimates.

The payment figure was significantly lower than the previous year, when Fed sent 65.3 billion dollars to the department. According to the Fed, the central bank's payments to the Treasury, commonly known as remittances, have been dropping since 2015.

Meanwhile, the Fed said its net income in 2019 decreased by 7.6 billion dollars to 55.5 billion dollars due to higher expenses and lower income.

"The decline in net income was primarily attributable to a decrease of 9.5 billion dollars in interest income on securities acquired through open market operations and a 1.5-billion-dollar-increase in interest expense on securities sold under agreement to repurchase," the Fed noted.

The Fed's income mainly comes from the interest income of its securities. These securities include U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities, and GSE debt securities, according to the Fed.

The 2019 audited Reserve Bank financial statements would be published in March and may include adjustments to these preliminary unaudited results.