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Friday, June 02, 2017

Fed’s Income Statement & IOER

Fed’s income comes mostly from interest income on their assets: treasury and MBS.  Fed expenses are IOER, opex, and remittances to the Treasury.  You can see their income statement here, second table on the page:

The important bits (from column “three months ended Sep 30, 2016”):
  1. Interest Income: $27.3 billion
  2. less Interest Expense (IOER @ 0.5%): $3.3 billion
  3. less Operating Expense: $1.6 billion
  4. equals Net Income before Remittance: $23.1 billion
  5. less Remitted to Treasury: $23.0 billion
  6. equals Net Income: $151 million.

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