If you thought SVB was bad ... The Fed is sitting on unrealized losses of ~$1.2 trillion on their $8.3 trillion bond portfolio. And the Fed is losing money every day by paying $$$ to commercial banks via reverse repos. https://twitter.com/WallStreetSilv/status/1635335898886995969?s=20 https://twitter.com/TaviCosta/status/1634929100723986436?s=20
Dumbass. Countries who’s debt is denominated in their own currencies don’t really have to worry about this. FED is just a tool to control money supply to optimize goals. They don’t make ‘losses’ or ‘profit’ in the traditional sense.
I disagree, also get help.
They can print money to solve
Oh yes everything gets solved printing money. Isn't money printing the reason for high inflation?
They are holding them to maturity, so no losses. Unlike banks that may have a need to sell bonds for liquidity, fed has no such obligation.
To above comments, it's not that simple. Everyone knows Fed can print money, but what is it doing with that money? Who benefits from these liquidity injections? If fed keeps printing money, it's not expanding/shrinking everyone's wealth equally, because it hands out these money to a selected group.
That’s the idea
You really have no idea of the financial system... Fed is like a power generator with a lot of electricity reserves if I use a metaphor. They may lose money and earn money, but nothing matters. All that matters for the Fed is: inflation and unemployment rate (you may add financial stabilty as a hidden mandate as well). Keeping the economy running is their only goal. Debt and assets are more like a state variable than an objective variable for them.
Nothing matters? You sound like dumb
Bloat is bloat This will bite, maybe tomorrow maybe 10yrs down the line.