[tossandthrow]

You might ask why the fed does not reduce the interest rate to "save" the usd.

The reason is that it makes no difference. The usd is a fiat currency and relies on trust in the institutions, in this case the fed.

If they bail out the government, then other investors will loose confidence and the rate will go up, manifest as inflation.

At this point the US citizens are going to pay massively for this. Either through hyper inflation or. Increased taxes to pay the debt.