Recent Changes to CBO’s Projections of Remittances From the Federal Reserve
This slide deck provides additional information about CBO’s most recent projections of remittances from the Federal Reserve, which have decreased largely because of higher projected short-term interest rates in 2023 and 2024.
In its February 2023 baseline update, the Congressional Budget Office significantly reduced its May 2022 estimate of remittances from the Federal Reserve—by $29 billion (or 97 percent) for 2023 and by $99 billion (or 16 percent) for the 2023–2032 period. Those changes are largely explained by higher short-term interest rates in 2023 and 2024, which increase the Federal Reserve’s interest expenses.
CBO now estimates that the Federal Reserve System will have costs that exceed its income through 2024, reducing remittances to close to zero for several years. In CBO’s projections, remittances nonetheless continue in every fiscal year in the projection period, reflecting the probability that some Federal Reserve banks will continue to make profits and remit them to the Treasury.
This slide deck provides additional information about CBO’s projections of the Federal Reserve’s activities, as well as the effects of those activities on its net profits and the resulting projections of remittances. These slides also include CBO’s updated projections of the assets and liabilities of the Federal Reserve.