If interest rates rise, the value of long dated bonds falls. If the Fed has to "mark to market" their positions, but still pass along all interest to the Treasury, their capital will be reduced.
I don't give a crap what they did last year.
You mean when they didn't privatize a gain and socialize a loss.
That would be too bad. It would be shocking, shocking I tell you, to expect a private institution like the Fed to be treated like any other investor.
Most everybody else has to 'mark to market' their positions. If it's good enough for everybody else, it's good enough for the Fed.