"St. Louis Fed Study: Fed Faces Four-Year Recovery for Income Loss"

The Federal Reserve is projected to need nearly four more years to recover from a historic operating loss caused by its rate rise cycle and balance sheet reduction, according to research from the Federal Reserve Bank of St. Louis. The losses, which began in September 2022, are recorded as a deferred asset and must be covered before the Fed can return excess earnings to the Treasury. The St. Louis Fed estimates that the deferred asset will be covered by mid-2027. Uncertainty over monetary policy complicates estimating the ultimate size of the loss and when the Fed will start returning money to the Treasury.