Fed 'Profits'?

The Fed does not reduce the deficit. All new money entering the system is born from debt. The Federal Reserve Note is their product, and the FRN is a debt instrument. The reason why the Fed's 'profits' grew is because it generated huge quantities of new debt to bail out banks, etc. Who backs that new debt? You and I. We are the collateral behind the Treasury bonds auctioned to create new money.

When the Fed's returns to the treasury grow, that is actually a signal that America's borrowing is increasing, and the gross public debt is growing. You only have to look at the data to see that.

The United States had a horrible fiscal year. We are in red ink hyperdrive. This news story is not good news. These are not really the Fed's true profits, either, but that's another story. These returns to the treasury are more like a franchise fee, paid by a private corporation for the exclusive monopoly they hold to create new legal tender.