Fed Releases Audited Financial Statements

The Federal Reserve today released 2018 financial statements—independently audited by KPMG—for the combined system, including the 12 Federal Reserve Banks and the Board of Governors. The Fed banks held a combined $4.1 trillion in assets at year-end, down $392.1 billion in 2017.

The Fed banks’ 2018 earnings were approximately $63.1 billion. A total of $65.3 billion was remitted to the U.S. Treasury in 2018, including two lump-sum payments totaling approximately $3.2 billion. The Fed spent $38.5 billion on interest on depository institutions’ balances at the reserve banks, an increase of $12.6 billion from the year prior. The banks’ operating expenses were $7 billion, with an additional $2 billion assessed to cover currency costs, operations of the Board of Governors and the operations of the Consumer Financial Protection Bureau.

The statements provided detail about the composition, value and earnings of the $4 trillion in Treasury bonds, GSE debt securities and mortgage-backed securities purchased through open market operations as part of the Fed’s quantitative easing programs. The Fed banks earned $112.3 billion in interest income from securities acquired through open market operations in 2018.