> If the fed were not providing this printed money to the banks
I'm pretty sure you don't actually mean "printed money", since the Federal Reserve doesn't do that. No currency was created for this market operation, just balances in books kept by the Federal Reserve Bank of New York.
The money which the fed gave to the banks did not previously exist. The fed increased the balance sheet of the banks to indicate they had cash they would not otherwise have had. Fits my definition of “printed.”
I think a more accurate phrase is "borrowed into existence", which is worse than printing because the balance created charges interest. Printing money directly rather than borrowing it is less inflationary, because more money is needed to service debt.
(This is all bad so I may be splitting hairs, but I would advocate for direct currency printing over this lending scheme if given the chance.)
Yes, it is not literally "printing money" in the way that the US Mint physically does. The term is appropriate though, as the result of translating from the paradigm banks operate in into the paradigm natural persons are bound by. We can only give away what we have received - I cannot give a friend $20 in exchange for an IOU, and then transmute that IOU into a crisp new $20 bill.
I'm pretty sure you don't actually mean "printed money", since the Federal Reserve doesn't do that. No currency was created for this market operation, just balances in books kept by the Federal Reserve Bank of New York.