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

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 https://en.wikipedia.org/wiki/Excess_reserves