Federal Reserve pays US government $88.9B WASHINGTON (AP) – The
Federal Reserve paid the federal government a record $88.9
billion in 2012. The central bank earned the money from the
Treasury bonds and mortgage-backed securities it has purchased
to drive interest rates lower and boost the economy. The Fed
said Thursday that the 2012 payment was up 17.9 per cent from
2011 when it paid the federal government $75.4 billion. It also
surpassed the previous record payment of $79.3 billion made in
2010. The Fed began buying Treasury bonds and mortgage bonds
during the last recession and has kept up the effort since the
downturn ended in June 2009 in an effort to boost the sub-par
recovery and lower high unemployment. It is currently purchasing
$85 billion in bonds each month. Fed officials say the massive
bond buying, known as quantitative easing, is needed until
economic growth is stronger. But critics contend that the bond
purchases could ultimately lead to higher inflation. All of the
Fed’s purchases have pushed