A theory on 2016

 Yellen's small rate hike held until the election, then Trump ran up rates. 

So, in this case we write it off to inherently unstable government. But the deposit kept leaving faster than Yellen could dump treasuries and seigniorage increases the one year decreases. The Fed goes back to tax collecting.   Powell is the same, he will go tax collecting when the new tax dodgers come back into power.

Normalization means banks are not tax collectors. 

No, looking at the target and the one year relationship, the Fed earns money on the upswing and loses money on the down swing. Except what? On the upswing it remits gains to Treasury and there is no visa versa. Each time the Fed goes through the cycle it has to hold additional long dated bonds to cover loses.

 Hence the leak, the unrecoverable imbalances end up there, a government loss account in the Fed sheet. They hold long dated bonds against losses until the next cycle. This is an increasing spiral, government chain will fall apart.