Each texture has an LOD0, original size. So if your texture is 2048x2048, when you look at the texture asset in Unreal, you ought to see a LOD Bias setting of 0. If you set this to 1, it will reduce the level of detail, guessing it will make it 1024x1024.
What this tells unreal is that the original texture is always going to be 2048x2048, but since you forced a base LOD of 1, it’s always going to be loaded and run at 1024x1024 at best.
This lets you use really large textures, say if you didn’t make them yourself, but still tell unreal to essentially scale it/them down to your desired size.