The Federal Reserve's bond-buying program helped the central bank send $79.6 billion to the Treasury Department in 2013. The Fed's income largely came from about $90 billion in interest on mortgage-backed securities and Treasury bonds.
A hypothetical 40.5% decline in Asian emerging-market equities is part of a scenario the U.S. Federal Reserve will use to test the resilience of six leading U.S. banks deemed systemically vital. The test also includes a 29.4% plunge in U.S. stocks and envisions high volatility in foreign-exchange markets, sovereign credit, private equity portfolios and commodities as well as 11.25% unemployment and a 25% drop in housing prices.
Burdened by a widening trade deficit and slower growth, Indonesia's rupiah has failed to follow other emerging-market currencies and recover ground against the U.S. dollar since the Federal Reserve announced it was sticking with its stimulus. Rate increases by Indonesia's central bank haven't helped. "Indonesia now has the thinnest foreign-exchange reserve coverage" in Asia, said foreign-exchange strategist Koon How Heng of Credit Suisse.
Most members of the Federal Reserve's Federal Open Market Committee want to see more evidence that the U.S. economic recovery is on solid ground and that the job market is improving before the Fed starts to phase out its bond-buying program, according to minutes from the central bank's meeting in June. Financial markets largely believe that the Fed will start scaling back bond buying in September, but the minutes suggest that move may come later.
A Federal Reserve survey of Wall Street dealers found increased demand from clients for funding of residential and commercial mortgage-backed securities. Hedge funds' risk appetite also rose in the three months to the end of February, according to the survey.