Morgan Stanley: The Federal Reserve is expected to restore positive cash flow

According to BlockBeats, on March 25th, Morgan Stanley analysts stated in a report on Monday that the Federal Reserve seems to be coming to an end to its historic streak of losses and may return to the track of returning cash to the Treasury Department. This involves the relationship between how the Federal Reserve makes money to fund its operations and the cash it pays to maintain control over short-term interest rates. The aggressive interest rate hikes that began three years ago have caused severe losses in the Federal Reserve's accounts, and now with the decline in short-term interest rates, Morgan Stanley believes that the Federal Reserve is approaching the critical point of restoring profitability. Morgan Stanley believes that the Federal Reserve's breakeven rate is about 4.8%, and "the shrinking balance sheet combined with lower policy rates has helped the Fed break free from losses. Analysts say that the Fed's continued reduction in bond holdings and the prospect of further interest rate cuts" means that the Fed will start making profits again. The Federal Reserve released its 2024 financial report last Friday, which showed that after a record deficit in 2023, the Fed's total net loss for 2024 was $77.5 billion, compared to $114.6 billion in 2023. The last time the Federal Reserve achieved profitability was in 2022. (Golden Ten)