Fed Says Operating Losses Down in 2025 as Interest Expenses Fell

The Federal Reserve’s operating losses fell to $18.7 billion last year, from $77.6 billion in 2024, as interest expenses on the central bank’s massive balance sheet declined.

Interest expenses fell to $167.4 billion from $226.8 billion in 2024, according to the Fed’s audited consolidated financial statements for 2025, released Wednesday. Interest income was $155.3 billion, down slightly from $158.8 billion.

The Fed’s deferred asset to the Treasury — the cumulative record of operating losses over recent years — rose to $243.5 billion. The Fed must pay down the deferred asset with future operating gains before it can make a positive ...