The Federal Reserve Becomes Most Profitable Bank In History

The Financial Times reports the financial crisis has helped the U.S. Federal Reserve become the most profitable bank in history.

The Financial Times explains that the Fed sends most of its profit to the Treasuryinstead of recapitalizing itself. And there's always the possibility these profits won't hold up in the future:It is possible that the Fed’s profits could turn to losses in future years if rising inflation forced it to tighten monetary policy rapidly. In that case, it would have to pay much more interest on its liabilities and might suffer capital losses if it had to sell securities rather than let them mature.