The Fed remits nearly 100% of its income to the US Treasury Department, being in sort of a 100% income tax bracket. In 2022, it still remitted $76 billion to the Treasury through August. But then it started making losses and there was no more income to remit.

Since 2001, the Fed has remitted $1.36 trillion in income to the Treasury. That gravy train has now derailed. Those remittances will be zero for years to come:

Now the Fed has losses and won’t remit anything. Even when it starts making money again years from now, it won’t remit anything until all the cumulative losses – already $100 billion and growing – have been earned back. This will take many years. Over this period of losses, and then of income to earn back those losses, the US deficit will be worse by the amount of the missing remittances.

Fed’s Cumulative Operating Losses Exceed $100 Billion. Rate of Weekly Losses Begins to Slow as QT Drains RRPs and Reserves | Wolf Street

Fed’s Cumulative Operating Losses Exceed $100 Billion. Rate of Weekly Losses Begins to Slow as QT Drains RRPs and Reserves