JPMorgan Chase moved almost $350 billion out of its Federal Reserve account and pushed most of that money into U.S. Treasuries, as the bank reacted to interest rate cuts this year.
JPMorgan’s SEC filings on Wednesday showed that its Fed balance dropped from $409 billion at the end of 2023 to $63 billion in the third quarter of 2025, while its Treasury holdings grew from $231 billion to $450 billion over the same period.
JPMorgan, which controls more than $4 trillion in assets, made this move after the Fed cut rates this month to the lowest level in three years.
The cuts followed a period when the Fed raised rates from near zero to above 5 percent between 2022 and early 2023, then began lowering them in late 2024.
Tracking how the bank redirects cash as rate cuts continue
Bill Moreland, the founder of BankRegData, said, “It’s clear JPMorgan is migrating money at the Fed to Treasuries. Rates are going down, and they’re front-running.”
Generally, JPMorgan does not give details about the maturities of the Treasuries it holds or any interest rate swap contracts it may use for risk control.
The bank had avoided large long-term bond positions in 2020 and 2021 when rates were low. That avoided the large paper losses that hit rivals such as Bank of America when the Fed raised rates fast in 2022.
JPMorgan then earned more on cash kept at the Fed than it paid out to customers because of stable deposits that did not move even during the tightening cycle. Its move into Treasuries before rate cuts helped it lock in higher yields and avoid lower earnings as rates kept falling.
The wider impact of JPMorgan’s decision across the banking system as the Fed lowers rates
The size of JPMorgan’s withdrawals was so large that it offset changes in Fed balances from more than 4,000 other U.S. banks. Total balances held by all banks fell from $1.9 trillion to $1.6 trillion since the start of 2024.
Banks have earned interest on cash at the Fed since 2008, which allowed the central bank to manage short-term rates. Those payments reached $186.5 billion in 2024 as high rates stayed in place before the cuts.
Political pressure also built around these payments.
The Senate rejected a bill in October that aimed to stop the Fed from paying interest on reserve balances. Senator Rand Paul, who led the push, said the Fed was paying “hundreds of billions of dollars to banks to keep money idle.”
Rand’s argument was backed by Republican senators Ted Cruz and Rick Scott, who also opposed the payments.
Rand released a report earlier this month saying the top 20 banks earned $305 billion in interest on reserves since 2013. JPMorgan received $15 billion of that in 2024 while reporting $58.5 billion in full-year profit.
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