Morgan Stanley says Fed poised to regain positive cash flow

The Federal Reserve seems to be nearing the end of significant losses, allowing potential cash returns to the Treasury. Morgan Stanley indicated that with the current breakeven rate at 4.8%, based on a 2.66% average coupon, the Fed might soon stabilize financially.

Losses have dropped dramatically from 114.6 billion USD in 2023 to 77.5 billion USD in 2024. The Fed has created a deferred asset worth 224.4 billion USD to manage prior losses, indicating that through strategic financial maneuvers, profitability may be just around the corner.