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>This is because the Fed’s trillions of dollars of long-term investments yield 2% but cost 4.6% to finance.

This statement isn't exactly true because the cost to finance the purchases of Treasuries during quantitative easing was not 4.6% when the purchases were made.

They would be losing money only if they were now selling those Treasuries at market rate, but they aren't doing that - they're just letting them roll off the balance sheet as they reach maturity.

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Post-QE, the Fed now has to pay interest on it's excess reserves[1] in order to achieve it's Federal Funds rate. This costs the Fed real money, and it no longer collects enough money on the interest paid on it's assets (given they're lower yielding assets than the current target rate) to offset this cost.

They are losing money regardless of what they do with their bond assets - they would simply lose even more money if they tried to sell their bond assets below purchase price/book value.

[1] https://en.wikipedia.org/wiki/Excess_reserves

How can an "investment cost the Fed" anything? Are they talking about the interest paid on Fed deposits?

I thought most central bank assets were short-term repos, or is this different for the Fed? Are these outright owned assets from QE?

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