Fed makes $81bn profit

Marion Dakers
THE US Federal Reserve reported record earnings yesterday, with profits jumping by more than 50 per cent to $80.9bn (£52bn) thanks to vast interest payments on its lending programmes.

The Fed will turn over more than $78.4bn to the US Treasury, its highest ever contribution, as its $2.16 trillion portfolio of securities including US government debt and mortgage-linked bonds brought record returns.

Most of the Fed’s earnings were generated through its near-$2 trillion purchases made to stimulate the faltering US economy during the crisis, which has helped to triple the lender of last resort’s portfolio since 2006.

In testimony to Congress last week, Fed chairman Ben Bernanke gave no sign the Fed was ready to start scaling back its latest bond purchase programme, and he was backed by Dallas Fed official Richard Fisher in an interview yesterday.