On March 25, Morgan Stanley analysts stated in a report on Monday that the Federal Reserve appears to be on the verge of ending its historic consecutive losses and may return to the path of remitting cash to the Treasury. This involves how the Federal Reserve generates money to fund its operations and the relationship with the cash it pays to maintain control of short-term interest rates. The aggressive rate hikes that began three years ago severely impacted the Federal Reserve's accounts, but now, with short-term rates declining, Morgan Stanley believes the Fed is approaching the threshold of returning to profitability.

Morgan Stanley believes the Federal Reserve's break-even rate is around 4.8%, stating that "the reduction of the balance sheet and lower policy rates will help the Fed escape losses." Analysts noted that the Fed's continued reduction of bond holdings and the prospect of further interest rate cuts "mean that the Federal Reserve will begin to be profitable again".

The Federal Reserve released its 2024 financial condition last Friday, showing that after a record deficit in 2023, the Fed's total comprehensive net loss for 2024 is $77.5 billion, compared to $114.6 billion in 2023. The last time the Federal Reserve was profitable was in 2022. (Jinshi)