The FED's finances are plunging into a deep abyss!

In the financial world, a radical change is taking place with devastating force. Once unshakeable, the American Federal Reserve now finds itself on the brink of an abysmal economic abyss. This prestigious institution guaranteeing monetary stability is struggling in an unprecedented financial storm. Thus, a new era of major financial turbulence is on the horizon.

A financial deficit of breathtaking magnitude

The most experienced analysts are shocked by the FED's finances. With staggering financial losses of $114.3 billion in 2023, the Federal Reserve is entering a zone of extreme financial turbulence. Moreover, this record deficit in the central bank's finances shatters previous historical records. In addition, this astronomical figure eclipses the net profit of 58.8 billion earned a year earlier. Furthermore, this unprecedented financial abyss raises intense questions about the financial solidity of the American system.

Although officials are trying to allay fears, it is undeniable that this financial hemorrhage is extremely serious for public finances. However, they insist that these recurring losses do not call into question current financial operations. However, this reassuring statement struggles to convince investors and economists who are at a loss in the face of this financial collapse. Especially since the dire forecasts announce a unprecedented degradation of finance for the years to come.

FED: The deep roots of the crisis

Certainly, the upheaval in monetary policy orchestrated by the FED is the main cause of this unprecedented financial chaos. Indeed, in its crusade against galloping inflation, the institution has drastically tightened its interest rate policy. Moreover, key rates have skyrocketed, going from levels close to zero to a stratospheric range of 5.25% to 5.5%. Consequently, this financial shift with serious consequences created a perfect storm for the finances of the American central bank.

In addition, the financial obligation to pay substantial interest to establishments to maintain their liquidity creates a gaping chasm in public accounts. Also, the interest charge on bank reserves reached the astronomical sum of 176.8 billion dollars last year in the finance of the FED. In addition, interest payments on the repo facility devoured another 104.3 billion. However, at the same time, financial income stagnates at 163.8 billion, a poor defense against this abysmal financial hemorrhage.

In short, let us remember that the FED can technically create money to cover its financial losses. However, this extreme scenario poses the threat of a collapse of the American monetary system. The deferred assets which record these dizzying financial deficits have already reached $157.8 billion. These astronomical losses are shaking the economic foundations of the United States. According to experts, it will take years before the central bank rebalances its deficit finance. This can obviously darken the financial future despite official assurances.