The Federal Reserve's unrealized losses on bond holdings narrowed to less than $850 billion last year.

ME News report: On April 15 (UTC+8), local time Monday in New York, the New York Federal Reserve stated that the Federal Reserve’s unrealized losses on its massive bond holdings last year narrowed compared with 2024. In 2025, the book loss was $844.2 billion, while in 2024 it was $1.06 trillion.

This figure was disclosed when the System Open Market Account (SOMA) annual report was released. The account covers the large amounts of cash, bonds, and other assets held by the Federal Reserve.

The Federal Reserve’s unrealized losses on its bond holdings are mainly accounting entries. In the view of the Federal Reserve and many observers, such paper losses do not affect the Federal Reserve’s operations, because it has no plans to sell the U.S. Treasuries and mortgage-backed securities it holds. As long as the assets are held to maturity, there will be no actual losses relative to the purchase price.

However, some believe that these paper losses reflect a poor track record of the Federal Reserve’s use of its balance sheet as a tool for market stabilization and stimulus, and argue that these losses could theoretically turn into actual problems in the future. (Source: Jin10)