Fed Posts Record Profit

Yahoo Finance reports:

The Federal Reserve generated record profits last year, reflecting money made off its extraordinary efforts to rescue the country from the worst economic and financial crisis since the 1930s.

The central bank announced Tuesday it logged a record windfall of $52.1 billion. Of that total, a record of $46.1 billion gets turned over to the Treasury Department. It marks both the biggest profit and payment to Treasury on records dating back to 1914, when the Fed began operating.

The bigger profit reported by the Fed came from ... earnings from the securities it held last year. Such income went up as the Fed's holdings of securities mushroomed. ...

The Fed is funded from the interest earned on it vast portfolio of securities. It is not funded by Congress. After covering its expenses, the Fed gives what is left over to the Treasury Department.

Besides the income from its securities, the Fed said it earned $5.5 billion from holdings related to the takeover of investment firm Bear Stearns and insurance company American International Group. The Fed also earned $2.9 billion from loans extended to banks, investment houses and others.