Federal Reserve to pay $88.5B of 2020 net income to Treasury

The Federal Reserve Board has announced preliminary results indicating that the Reserve Banks provided for payments of approximately $88.5 billion of their estimated 2020 net income to the U.S. Treasury. The 2020 audited Reserve Bank financial statements are expected to be published in March and may include adjustments to these preliminary unaudited results.

The Federal Reserve Banks' 2020 estimated net income of $88.8 billion represents an increase of $33.3 billion from 2019, primarily attributable to a $27.1 billion decrease in interest expense associated with reserve balances held by depository institutions and a $5.3 billion decrease in interest expense associated with securities sold under agreements to resell. The Federal Reserve Banks had interest expense of $7.9 billion primarily associated with reserve balances held by depository institutions, and interest expense of $711 million on securities sold under agreement to repurchase.

Operating expenses of the Reserve Banks, net of amounts reimbursed by the U.S. Treasury and other entities for services the Reserve Banks provided as fiscal agents, totaled $4.5 billion in 2020. In addition, the Reserve Banks were assessed $831 million for the costs related to producing, issuing, and retiring currency, $947 million for Board expenditures, and $517 million to fund the operations of the Consumer Financial Protection Bureau. Additional earnings were derived from income from services of $448 million. Statutory dividends totaled $386 million in 2020.