<p>It is not waving them but it is remitting them back to the treasury. Waving would mean treasury does not have to pay the interest. Remittance means that even though treasury pays the interest rate they get it back.</p>
<p>Hence treasury does have to pay the interest but since Fed is government institution all Fed profits are transferred to the treasury. <a href="https://www.federalreserve.gov/newsevents/pressreleases/other20200110a.htm" rel="nofollow noreferrer">Fed</a> is not just sending treasury the profits from interest but all of its net earnings.</p>
<p><a href="https://i.sstatic.net/3bQMl.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/3bQMl.jpg" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2022-05-11T13:31:36.093Z
Ok, wait a minute. I thought that the Federal Reserve only remits its PROFITS back to the Treasury. Profit is not the same thing as revenue.
Lassie Fair
CC BY-SA 4.0
2022-05-11T13:52:48.903Z
@LassieFair yes I never claimed it is, however Fed costs are trivial it’s just budget for staff, offices etc. excluding the remittance to the government which is considered expense on Fed balance sheet the Fed operational costs are less than 2% of their revenue (and Fed gets revenue also from lending to private banks not just government). Even just the revenue on debts issued to private institutions is large enough to pay for the operating costs several times over and in essence if Fed would not subtract these costs it would anyway have to be subsidized by gov as other gov institutions so
1muflon1
CC BY-SA 4.0
2022-05-11T13:53:23.380Z
Treasury in practice gets all its interest back and then some more. Yes it does not get all revenue as some has to be set aside for its operation but the amounts are trivial. On net basis Fed is money maker for treasury anyway
1muflon1
CC BY-SA 4.0
2022-05-11T13:05:12.073Z
2022-05-11T13:05:12.073Z
1muflon1
<p>I read a rumor on a forum that the Federal Reserve has recently (since the pandemic) been waiving interest payments on its portfolio of US treasury bonds and notes.</p>
<p>I was unable to verify this rumor one way or the other. Is there any substance to it?</p>

<government-debt><federal-reserve>
Is the Federal Reserve waiving itnerest payments on its treasury portfolio?
Lassie Fair
# Is the Federal Reserve waiving itnerest payments on its treasury portfolio?

(Asked by: username_0 on 2022-05-11)

I read a rumor on a forum that the Federal Reserve has recently (since the pandemic) been waiving interest payments on its portfolio of US treasury bonds and notes.

I was unable to verify this rumor one way or the other. Is there any substance to it?

**Tags:** government-debt, federal-reserve


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## 1 answers

### Answer by username_1 on 2022-05-11. Score: 1

It is not waving them but it is remitting them back to the treasury. Waving would mean treasury does not have to pay the interest. Remittance means that even though treasury pays the interest rate they get it back.

Hence treasury does have to pay the interest but since Fed is government institution all Fed profits are transferred to the treasury. [Fed](https://www.federalreserve.gov/newsevents/pressreleases/other20200110a.htm) is not just sending treasury the profits from interest but all of its net earnings.

[![enter image description here](https://i.sstatic.net/3bQMl.jpg)](https://i.sstatic.net/3bQMl.jpg)

> **Comments:**
> **username_0**: Ok, wait a minute. I thought that the Federal Reserve only remits its PROFITS back to the Treasury. Profit is not the same thing as revenue.  
> **username_1**: @username_0 yes I never claimed it is, however Fed costs are trivial it’s just budget for staff, offices etc. excluding the remittance to the government which is considered expense on Fed balance sheet the Fed operational costs are less than 2% of their revenue (and Fed gets revenue also from lending to private banks not just government). Even just the revenue on debts issued to private institutions is large enough to pay for the operating costs several times over and in essence if Fed would not subtract these costs it would anyway have to be subsidized by gov as other gov institutions so  
> **username_1**: Treasury in practice gets all its interest back and then some more. Yes it does not get all revenue as some has to be set aside for its operation but the amounts are trivial. On net basis Fed is money maker for treasury anyway  

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