What Happens if Interest Rates Were Allowed to “Normalize”?

The Federal Reserve makes a ton of money on its $3T horde of government bonds. In 2012 the Fed earned a tidy $90B by borrowing short and lending long. That income number is the difference between interest income and expense. The P/L does not reflect the fact that the Fed as a huge unrealized gain [...] View the full post at: What Happens if Interest Rates Were Allowed to “Normalize”? Related posts: Lower Interest Rates and Home Prices What’s behind Recent Changes in Long-Term Interest Rates? The Fed’s Unpublished Outlook for Interest Rates