[bun_at_work]

This simply isn't how the financial system works. The bank will only loan out amounts based on what they hold in reserve. Asking the Fed/Treasury to "swing their wand around" isn't really close to what happens. Also, the Federal Reserve and the Treasury are different entities.

They don't just "print money" for banks arbitrarily.

[kqr]

Printing money for banks arbitrarily is exactly what they do -- what they have to do, if they want to have any chance at meeting their target overnight rate. (Which they are.)

Demand for money comes from the market and is not very flexible, and certainly not under anyone's control. Lenders will meet the demand for money at ever increasing prices (i.e. higher overnight rates) unless money gets printed arbitrarily.

[spiralx]

Banks literally create money by lending, here's a good overview from the Bank of England:

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...