The process of printed money reaching the government? I saw a link that suggested that when the fed prints money, this money is actually lent to the government in the form of bonds, not given. This, despite the fact that the Fed is (loosely) associated with the government.

My question is... 


Is this correct?
If so, how are the interest rates determined?
1) The phrasing you use is somewhat non-standard, but it seems close to the correct view.

The U.S. Treasury borrows by issuing bonds. What people loosely call “printing money” (a badly defined phrase) is that the Federal Reserve buys those bonds from their owners. The original owners of the bonds “lent” the Treasury the money, and the Fed just takes the loan of their hands. The Fed pays for the bond by creating a deposit at the seller’s bank (the central bank is a bank which takes deposits from private banks), and that deposit is considered to be “money” (technically, part of the monetary base).

The Treasury owns the common equity of the Federal Reserve, so to a certain extent, it is one arm of the government dealing with another.

There are plenty of questions on here that discuss “quantitative easing” and give longer explanations.

2) The Fed buys and sells bonds in the market, so it is a market rate.