3 ms·
The other comment makes some points, but the bottom line is that the purchased bonds pay higher interest than the Fed Funds rate, and the value of them has also
by justincormack 12y ago
The other comment makes some points, but the bottom line is that the purchased bonds pay higher interest than the Fed Funds rate, and the value of them has also gone up a lot as long term rates have gone down. So capital gains and income over cost of funding.
The capital side might change, as bonds may fall in price before the Fed sells them.