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

ME News report. On Monday, April 15 (UTC+8), the New York Federal Reserve stated in its local time that the unrealized losses on the Fed’s massive bond holdings last year have narrowed compared with 2024: the book loss for 2025 was $844.2 billion, versus $1.06 trillion for 2024. This figure was disclosed when the System Open Market Account (SOMA) annual report was released; the account covers the Fed’s large holdings of cash, bonds, and other assets. The unrealized losses on the Fed’s bond holdings are mainly on the accounting level. In the view of the Fed and many observers, such paper losses do not affect the Fed’s operations, because there are no plans to sell the U.S. Treasuries and mortgage-backed securities it holds. As long as they are held to maturity, there will be no actual losses relative to the purchase price. However, some believe that 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 these losses could theoretically turn into real problems in the future. (Source: Jin10)