Morgan Stanley says Fed poised to regain positive cash flow
(Reuters) -The Federal Reserve appears to be on the threshold of ending a historic streak of losses, which in turn could get it back on track to returning cash to the Treasury somewhere down the line, analysts at Morgan Stanley said in a note on Monday. At issue is the relationship between how the Fed makes money to fund its operations and the cash it pays as part of the system to maintain control over short-term interest rates. Aggressive rate rises starting three years ago tipped Fed books deeply into the red and now, with short-term rates down, the investment bank believes the Fed is hovering near the point where it can earn money again.