On January 10, the Federal Reserve announced preliminary numbers on its remittances to Treasury for 2018.
The combination of reduced holdings of securities and rising interest rates means that for a third year in a row, remittances to the Treasury are declining, although they remain significant.
For 2018, the preliminary number is $65.4 billion, or remittances of $62.2 billion and including $3.2 billion in lump-sum payments required to reduce the aggregate Reserve Bank capital surplus to $6.825 billion per the Bipartisan Budget Act of 2018 and the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final accounting is expected in March after a routine audit.
Net income for the Fed was mainly from $112.3 billion in interest income on securities held with interest expense of $38.5 billion paid on reserve balance held by depository institutions and incurred interest expense of $4.6 billion on securities sold under repurchase agreements.
The decrease from 2017 was $17.6 billion, “primarily attributable to an increase of $12.6 billion in interest expense associated with reserve balances held by depository institutions.”
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