Kroraina on Nostr: The Federal Reserve is not a typical business nor an arm of the government. The ...

The Federal Reserve is not a typical business nor an arm of the government. The Fed’s monetary policy actions are guided by their mandate authorized by the Congress to promote maximum employment and stable prices for the American people. The cumulative losses are the costs for the Federal Reserve’s efforts to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Inflation has eased somewhat and longer-term inflation expectations appear to remain well anchored. At the same time,the US labor market remains extremely tight, with the unemployment rate at a 50-year low, job vacancies still very high, and wage growth elevated.
If the Fed operates as a typical company, they can hold their assets such as Treasury securities and MBS till the prices rise in future market situation so that they can earn money. However, the Fed cannot do things that way. They need to reduce the size of their balance sheet as an effort to contain inflation, and there are costs for the Fed to fight inflation.