The Federal Reserve paid out nearly $11 billion to banks and money market funds in August just for keeping the cash of theirs and their clients parked at the Fed.
The central bank is using this method to discourage lending at rates it considers too low. As it raises the rates to counter inflation, though, it also pays the bankers more and more.
So far this year, the Fed has paid out over $28 billion and the number can easily double or even triple by the end of the year, depending on whether and how much the Fed will continue to raise the rates….