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

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ME News report. On Monday, April 15 (UTC+8), at New York Federal Reserve local time, the Federal Reserve said that last year the unrealized losses on its massive bond holdings narrowed compared with 2024, with a book loss of $844.2 billion in 2025, versus $1.06 trillion in 2024.

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

The unrealized losses on the Federal Reserve’s bond holdings are mainly accounting-related. In the view of the Federal Reserve and many observers, these 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 they are held to maturity, they will not result in actual losses relative to the purchase price.

However, some believe that these paper losses reflect a negative track record of the Federal Reserve 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)

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