But then, on that day, the Treasury will have to redeem the bonds at face value. Whereupon they will have to either get some money from the tax payers or borrow some money from folks interested in buying new bonds or sell new bonds to the Fed if all of the other bond buyers are demanding an interest rate that is outside of where the Treasury needs it to be.
Yes, the Treasury has to pay off bonds when they mature. Same as it ever was.
Whereupon they will have to either get some money from the tax payers or borrow some money from folks interested in buying new bonds
Yes, same as it ever was.
or sell new bonds to the Fed
The Treasury doesn't sell bonds directly to the Fed.
if all of the other bond buyers are demanding an interest rate that is outside of where the Treasury needs it to be.
You keep saying that. It doesn't matter what the Treasury "needs rates to be". They sell say $32 billion in 3 year Notes (tomorrow) and they may prefer rates stay near 1.25%, but if the bids are all at 1.5%, that's the rate.