On: Fed hikes rates as inflation worries push up bond yields

[darth_avocado]

The debt is owed by the treasury, fed prints the money. What you’re describing is not how the monetary system works.

[almost_usual → darth_avocado]

The Fed purchased Treasury securities during COVID QE. Those securities had low yields and cash reserves were created during those purchases.

Those cash reserves are held by banks which the Fed funds rate pays interest on (what was hiked).

Meanwhile the fixed rate debt from QE remains the same.