The Fed created $4.5 trillion of new debt with zeros and ones on an electronic screen.
It was called QE.
Now we have to pay it back with interest.
If they take a haircut, what have they lost?
Because haircuts are coming.
The fed will have lost nothing, but you still show lack of understanding. If the government repays all the QE back to the fed, $4.5T of money supply leaves the economy. I take it from your comments you regard QE was not a good thing, which on some level I agree. So if the government demands, let say, 50% haircut, then $2.25T of QE remains in the money supply. QE becomes permanent.