Fed Records 3rd Consecutive Quarterly Gain But Remittances To Treasury Won't Resume Any Time Soon

Michael Gray 2.95K Followers Follow Summary The Federal Reserve reported a $12.7 billion Q2 profit, its largest since 2Q22 and third consecutive quarterly gain. Despite profitability, the Fed carries a -$233 billion deferred asset; remittances to the Treasury are unlikely before mid-2031, and likely later. Unrealized losses on SOMA holdings have grown to -$878 billion, constraining the Fed’s ability to adjust its balance sheet as desired. Any aggressive reduction of the Fed’s balance sheet, particularly sales of Treasuries or MBS, risks further market disruption and higher yields. asbe/iStock via Getty Images Second Quarter Operating Results Last week the Fed quietly released their second quarter operating results. The good news is that the Fed recorded a profit for the third consecutive quarter, following twelve quarters of operating losses. This article was written by Michael Gray 2.95K Followers Follow Michael Gray has devoted his career to following the capital markets and managing fixed income assets. He founded Gray Capital Management LLC and before that was Head of Taxable Fixed Income at Fidelity Investments. Michael has an MBA in Finance from Wharton and a BA in Economics from Union College. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.