US Banks Reap $1tn Windfall from Fed’s Reverse Repo

The Fed Paid Banks Interest. The banks did not pay you.

Intro: September 24th the FT wrote a piece explaining the windfall profits banks earned during the rate hike regime. Here is our coverage of that piece.

US banks have made a massive $1 trillion windfall over the last two and a half years, thanks to the Federal Reserve’s high interest rates, according to an analysis by the Financial Times. While banks earned higher returns from the Fed on deposits, they passed on far less to their customers, widening their profit margins.