But if they keep hiking rates, it means more usd goes in circulation right? As they've to pay more to people having FDs?

Or this rate only applies to money that banks give as a loan?

The other way around. They are making people pay interest rates for them to borrow them usd. So you get 1USD but you have to payback 1,03 USD (for ex.)

When you want to play with high rates yiu should track credit market, gdp is shrinking with every rate hikes. Furthermore with the record level nation debt like USA can't raise rates to the sky