The United States is experiencing the highest inflation in 40 years. The Federal Reserve has finally started raising interest rates to get inflation under control. However, higher interest rates have the negative side effect of reducing the value of the securities owned by the Fed, which could inhibit its monetary policy and result in losses to the U.S. Treasury and therefore to American taxpayers. …
We estimate that at the end of May, the Federal Reserve had an unrecognized mark-to-market loss of about $540 billion on its $8.8 trillion portfolio of Treasury bonds and mortgage securities. This loss, which will only get larger as interest rates increase, is more than 13 times the Federal Reserve System’s consolidated capital of $41 billion.
At the New York Times, Paul Krugman writes that cryptoassets are a “Great Scam,” with all cryptoassets worthless. He even suggests that blockchains are part of the hype.” I remember the housing bubble and the subprime crisis,” Krugman writes. “And if you ask me, it looks as if we’ve gone from the Big Short to the Big Scam.” …
For the first time in its 108-year history, the Federal Reserve System faces massive and growing mark-to-market losses and is projected to post large operating losses in the near future. In a 2011 policy statement, the Federal Reserve Board outlined its plan to monetize system operating losses notwithstanding the (apparently) little-known fact that the Federal Reserve Act requires Federal Reserve member banks (the stockholders who own the Federal Reserve district banks) to share at least a portion of district reserve bank operating losses. …
For the first time in its 108-year history, the Federal Reserve System faces massive and growing mark-to-market losses and is projected to post large operating losses in the near future. In a 2011 policy statement, the Federal Reserve Board outlined its plan to monetize system operating losses notwithstanding…
The American economy, the largest and most dynamic in the world, is a geopolitical issue. And right now, it is in a predictable period of dysfunction. It’s been compared – rightly, in my opinion – to the tumult of the 1970s…
A bigger defense budget will enable Japan to better manage Chinese and North Korean threats, thus alleviating the United States’ security burden in the region…
The Indo-Pacific Economic Framework, the U.S.-led effort to counter China and foster economic engagement in the region, has officially launched…
