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

ME News, on Monday, April 15 (UTC+8), according to the New York Fed’s local-time statement, the unrealized losses on the Fed’s large bond holdings last year narrowed compared with 2024. The Fed recorded a book loss of $844.2 billion in 2025, compared with $1.06 trillion in 2024.

This figure was disclosed when the System Open Market Account (SOMA) annual report was released. The account covers a large amount of cash, bonds, and other assets held by the Fed. The unrealized losses on the Fed’s bond holdings are mainly accounting in nature. In the view of the Fed and many observers, such paper losses will not affect the Fed’s operations, because there are no plans to sell the held U.S. Treasuries and mortgage-backed securities.

As long as they are held to maturity, they will not result in actual losses relative to their purchase prices. However, some believe these paper losses reflect a negative track record of the Fed using its balance sheet as a tool for market stabilization and stimulus, and they argue that, in theory, these losses could turn into real problems in the future.

(Source: Jin10)