FED Faces Massive $80 Billion Loss in First Annual Operation Report

The Bitcoin Twitter account has announced that the Federal Reserve is now officially in the process of becoming insolvent. In 2023, it is speculated that the FED will report its first annual operational deficit, which is expected to be $80 billion.

A yearly operational deficit of $80 billion would be the first time this has happened since 1915. The Federal Reserve is likewise said to have negative capital of $38 billion. The Twitter account further claimed that this loss does not include the portfolio’s unrealized losses, now estimated to be $1.3 trillion.

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Banking crisis deepens: Big banks closed

The widespread failure of large banks in 2023 has been widely covered in the news. Silvergate, Silicon Valley, and Signature Bank are defunct financial entities. Silicon Valley Bank has been one of the major bank failures since the 2008 financial crisis.

While market prices were volatile on Monday, the consensus was that the Fed would continue to tighten its monetary policies. Traders predicted a 0.25% increase in interest rates at the Federal Open Market Committee meeting in Washington, D.C., on March 21-22.

Interest rate impasse: Analysts at odds

Goldman Sachs announced on Monday that it does not expect the Federal Reserve to boost interest rates this month. But, few other Wall Street experts agree with him. On the other hand, Bank of America and Citigroup forecast that the Fed will raise interest rates by a quarter-point.

The cryptocurrency market has been on a positive run amid uncertainty. Bitcoin has broken beyond the $24,500 price level, and the whole market is trading positively. At present, it is still being determined if this is a trap.

The Federal Reserve’s rate cuts announced today have presented an attractive opportunity for crypto investors. Concerns of a future recession and the Fed’s decision to lower interest rates have enabled Bitcoin and other cryptocurrencies to break away from conventional banking and establish a new store of value.