Remember that the vast majority of US government debt is held by....the American public. The Fed was buying treasuries that normal investors would have to regulate rates, it's not like suddenly there's 0 demand domestically for US bonds. If the Fed wants to take a haircut and start offloading their balance sheet at a discount I'll happily throw a treasury ladder together in my retirement account, stock market gains are about to get incredibly volatile and I'll take a guaranteed yield over what I predict to be a major correction in the making.
According to some napkin math, the average American household would need to buy ~$20k in bonds over the QT period. This is on the order of the average amount of savings/investments per household.
Remember that the vast majority of US government debt is held by....the American public. The Fed was buying treasuries that normal investors would have to regulate rates, it's not like suddenly there's 0 demand domestically for US bonds. If the Fed wants to take a haircut and start offloading their balance sheet at a discount I'll happily throw a treasury ladder together in my retirement account, stock market gains are about to get incredibly volatile and I'll take a guaranteed yield over what I predict to be a major correction in the making.