The Black Swan Rears Its Head: The Fed Has Negative Capital Using GAAP Accounting

The Fed’s unprecedented experiments with years of ZIRP (Zero Interest Rate Policy) and QE (Quantitative Easing), where it bought up trillions of dollars of low-yielding U.S. Treasuries and agency Mortgage-Backed Securities (MBS) and quietly parked them on its balance sheet, are now posing a threat to the Fed’s flexibility in conducting monetary policy.