JPMorgan pulls $350bn from Fed to buy up Treasuries
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US banksAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTJPMorgan pulls $350bn from Federal Reserve to buy up TreasuriesBiggest US bank has moved to lock in higher yields ahead of central bank rate cutsJPMorgan has emerged as the biggest winner in banking from the Fed’s tightening of monetary policy © Michael Nagle/BloombergJPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on x (opens in a new window)JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on facebook (opens in a new window)JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on linkedin (opens in a new window)JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on whatsapp (opens in a new window) Save JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on x (opens in a new window)JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on facebook (opens in a new window)JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on linkedin (opens in a new window)JPMorgan pulls $350bn from Federal Reserve to buy up Treasuries on whatsapp (opens in a new window) Save Joshua Franklin in New YorkPublishedDecember 17 2025Jump to comments sectionPrint this pageStay informed with free updatesSimply sign up to the US banks myFT Digest -- delivered directly to your inbox.JPMorgan Chase has withdrawn almost $350bn in cash from its account at the Federal Reserve since 2023 and ploughed much of it into US government debt, as the bank tries to defend itself against rate cuts that threaten to erode its profits.JPMorgan, which has more than $4tn in assets, slashed its balance at the Fed from $409bn at the end of 2023 to just $63bn in the third quarter of this year, according to data compiled by industry data tracker BankRegData. The bank increased its holdings of US Treasuries over the same period from $231bn to $450bn, a move that allowed it to lock in higher yields in anticipation of the central bank cutting interest rates. The transfers reflect how the largest bank in the US has been preparing for the end of a period of easy profits in which it was paid to park cash at the Fed while having to pay many of its depositors close to nothing.In 2022 and early 2023, the Fed rapidly lifted its benchmark federal funds target range from close to zero to more than 5 per cent. The central bank subsequently started lowering its target range in late 2024, and has signalled that more cuts are on the table. This month, it cut rates to the lowest level in three years. “It’s clear JPMorgan is migrating money at the Fed to Treasuries,” said BankRegData’s founder Bill Moreland. “Rates are going down and they’re front-running.”JPMorgan declined to comment. JPMorgan does not disclose the duration of the Treasuries in its portfolio, nor the extent to which it is using interest rate swap contracts to manage risk.JPMorgan avoided investing heavily in long-term debt when interest rates were low in 2020 and 2021, unlike rivals such as Bank of America which suffered steep paper losses from their investments when interest rates rose sharply in 2022. JPMorgan’s sticky deposit base then enabled it to earn a greater return on its cash at the Fed during the period of high interest rates than it had to pay its depositors. The latest shift from cash to Treasuries ahead of rate cuts has helped lock in higher interest rates, limiting the hit to earnings from falling rates. The scale of JPMorgan’s withdrawals was so large as to offset the movement of cash in and out of the Fed by all of the rest of America’s 4,000-plus banks. Since the end of 2023, the total amount of cash banks have on deposit at the Fed fell from $1.9tn to about $1.6tn.Banks have earned interest from cash kept at the Fed since 2008, giving the central bank a mechanism by which to influence short-term interest rates and liquidity in the financial system. Interest payments soared in the past two years, however, with $186.5bn paid out as interest on reserves in 2024. The payment of interest on reserve balances by the Fed is controversial, and the Senate voted down a bill in October that would have banned the Fed from paying it.
Senator Rand Paul, who pushed for the change, argued that the Fed was paying hundreds of billions of dollars to banks to keep money idle. Other Republican senators including Ted Cruz and Rick Scott have also voiced opposition. In a report earlier this month, Paul claimed that the 20 largest recipients of interest payments from the Fed had received $305bn since 2013 and that JPMorgan received $15bn in 2024, a year in which its total profits were $58.5bn.Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article US Treasury bonds Add to myFT US banks Add to myFT US interest rates Add to myFT JPMorgan Chase & Co Add to myFT Federal Reserve Add to myFT Comments