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Federal Reserve Chairman Ben Bernanke smiles during a Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill, February 14, 2008 in Washington DC. - 


Bill Radke: In other news, it's not just investment banks raking in profits. The Federal Reserve reported today it made a record profit in 2009. Here's Marketplace's Sam Eaton.

Sam Eaton: The Fed brought in about $46 billion last year, money that goes straight to the U.S. Treasury. It's the biggest annual profit in the central bank's near hundred-year history.

And the reason for it is simple: the Fed aggressively bought up government debt and mortage securities as a way to inject cash back into the economy. And now the interest income from those investments is paying off in spades.

But Mesirow Financial Chief Economist Diane Swonk says those high returns don't come without giving something up:

Diane Swonk: What the Fed has done is essentially moved out into the market and played a role much like a private investor, taking up a place that private investors disappeared from. In doing that, they also took on more risks than they did in the past.

Risks that could come to roost if, for example, the Fed was forced to sell some of those assets at a price below what they paid.

In Los Angeles, I'm Sam Eaton for Marketplace.