Fed Pays $88.5 Billion to Treasury in 2020

The Federal Reserve System paid $88.5 billion out of its annual net income to the U.S. Treasury in 2020, according to figures released today, an increase from 2019.

The Federal Reserve Banks’ net income in 2020 was estimated at $88.8 billion, an increase of $33.3 billion from 2019. The increase in the Fed banks’ net income was largely attributed to a decrease in interest expense associated with reserve balances held by banks and a decrease in interest expense associated with securities under agreement to resell. Fed bank income comes mostly from interest income on securities purchased through the system’s open market operations.

Treasury payments are calculated after the costs of operations, dividends and other expenses. The regional Fed banks had net operating expenses of $4.5 billion in 2020, and the Fed system also paid $831 million to produce and retire currency, $947 million to fund the Federal Reserve Board of Governors and $517 million for the operations of the Consumer Financial Protection Bureau. Dividend payments to Federal Reserve member banks totaled $386 million.