Fed sends $79.6 billion in profits to Treasury

The Federal Reserve handed the U.S. Treasury $79.6 billion in profits in 2013.

The central bank reported the annual financial statements for its 12 member banks, as the institution continues to reap hefty profits on a portfolio that now total $4 trillion.

{mosads}The Fed’s earnings actually totaled $81.4 billion, and the central bank remits to the Treasury whatever profit remains after it funds its operating costs.

The profit came primarily from interest income the Fed made on its massive holdings of bonds, which grew by over $1 trillion throughout 2013 as the Fed continued to try and support the economy through regular purchases as part of a “quantitative easing” program.

The Fed reported it earned $90.4 billion in interest on those holdings, up nearly $10 billion from the year before.

At the end of 2013, the Fed announced it was beginning to slow the scale of those purchases, with an eye toward stopping them altogether by the middle of 2014, assuming the economy continued to improve as expected.