So the Federal Reserve pays out interest on balances deposited by banks. As of yesterday at close, the interest paid on these balances is 3.15%. https://www.fe

So the Federal Reserve pays out interest on balances deposited by banks. As of yesterday at close, the interest paid on these balances is 3.15%. https://www.federalreserve.gov/monetarypolicy/reserve-balances.htm https://www.federalreserve.gov/monetarypolicy/reserve-balanc... While they do own assets on their balance sheet, these assets have a fixed interest rate. The interest rates stays the same as it was when they bought it. When the fed was buying these treasuries during QE, rates were very low. Less than a percent, less than even half a percent for a while. The interest rate on these interest earning assets, while it is nominally billions of dollars, will stay flat. Meanwhile, the interest it pays out to banks will increase and increase and increase. If no profit will be available, no remittances will be paid to the treasury.