As a layperson, "For the First Time, the Fed is Losing Money" as a headline from the Wall Street Journal is concerning. A lot of people are going to see that headline, and read just the first couple of paragraphs - not gonna pay for a subscription - and their takeaway in what they perceive of this economic climate is going to be that the Federal Reserve is on its way to insolvency. It doesn't really matter if that's even possible. Is it possible? I don't know if it is or not.
I agree with the GP that it's a scary headline. I wouldn't call myself hysterical; I'm not hyperventilating or anything.
The issue with the headline is not with people who understand finance, it's with people who don't but know enough to see the WSJ as an authority. They won't notice that it's an opinion piece, and they don't really know enough to understand if this is actually a problem or not.
It absolutely can happen. Not necessarily that they become insolvent to the point of closing up shop because they can borrow from the treasury (so long as the debt ceiling gets raised sufficiently) but they are basically already there.
They are paying more than they are taking in and are having a shortfall to the treasury.
I agree with the GP that it's a scary headline. I wouldn't call myself hysterical; I'm not hyperventilating or anything.
The issue with the headline is not with people who understand finance, it's with people who don't but know enough to see the WSJ as an authority. They won't notice that it's an opinion piece, and they don't really know enough to understand if this is actually a problem or not.