Fed Pays $65.4 Billion to Treasury

The Federal Reserve System paid $65.4 billion out of its annual net income to the U.S. Treasury in 2018, according to figures released today. The payments dipped slightly from previous years, falling from $92 billion in 2016 and $80.2 billion in 2017. The reduction in the Fed banks’ net income was attributed primarily to increased interest expenses; as rates rise, the Fed is paying more in interest on reserve balances held by banks and credit unions.

The Federal Reserve Banks’ net income in 2018 was estimated at $63.1 billion; Treasury payments are calculated after the costs of operations, dividends and other expenses. Fed bank income comes mostly from interest on securities purchased through the system’s open market operations. Net income fell by $17.6 billion from 2017.

The regional Fed banks had net operating expenses of $4.3 billion in 2018, and the Fed system also paid $849 million to produce and retire currency, $838 million to fund the Federal Reserve Board of Governors and $337 million for the operations of the Consumer Financial Protection Bureau — a 41 percent cut from the year before. Dividend payments to Federal Reserve member banks totaled $1 billion.