Some people do see the Fed directly purchasing Treasury debt, a.k.a. quantitative monetary easing, in that way(debt-free money), but I am not among them.
Given our present monetary policy constraints, it may be as close as we can get.
But, not exactly.

It’s not debt-free because it does create a debt from the government to the holder of the instrument.
Had the government paid whatever money into existence rather than issue the note or Bond, then it would be debt-free.

This raises of the question of whether the Fed is part of the government.
To me, it is not – it is legally a private bankcorporation, a licensed cartel that creates and controls the circulating medium in this country. And, it makes its own rules.
Were the Fed to be incorporated as a public body under the Treasury, then this would be closer to debt-free money.

So, a private bankcorporation is holding a government Treasury issuance of debt. That the Fed is holding this ‘thing’ is strictly transitory.
The Fed regularly buys and sells the government securities that it holds for the purpose OSTENSIBLY of managing its monetary policy goals.
There is nothing to stop the Fed from selling the Bond to its primary marketers and the public.
There are not two types of bonds – one that is held by the Fed and one that goes only to market.
So, in that sense, it is clearly not debt-free money.
Even for a little while.

As to the interest payment matter.
You can see that if the Fed markets the security on its own initiative, the payment stream can go anywhere from Kansas to St. Petersbourg.
But, even if it’s held, the Treasury is not guaranteed of getting back any of its payments from the Fed.
That payment is not required by law. It is a policy adopted by the Fed Board, only after the Congress exposed the insanity of doing otherwise.
Fed Board policy is changeable by the Fed Board. And, more than one of the Fed Board of Govs has stated that it may be necessary (in order to carry out monetary policy) to reduce or curtail those payments.

IMHO, the only way to get debt-free money is the adoption of the monetary reforms we are promoting here on these pages. There is NO reason for the federal government to issue debts to private bankers who have the power to create the money that it lends to the taxpaying people. None.
Google up Thomas Edison, Henry Ford and the Muscle Shoals Project.

Thanks for the comment.
The Money System Common

Anyhow I have a question about Quantitive Easing. When the Fed buys new treasury bonds directly from the Treasury is that the same as non debt-based money since the interest paid by the government would go to the Fed and they pass that on to the Treasury?