The article also notes that private investors have no appetite for more bonds and prices will crater as a result. Could this lead to higher yields and thus higher borrowing costs for the government? Are interest payments about to make a major jump in the federal budget?
If you ask me, yes and yes. But I don't think they will get very high. I've seen claims of low demand for US bonds before and it turned out the exact opposite.
Right, I supposed we should consider bonds compared to where else would you put the money atm - nothing looks particularly attractive.
Basically QT means fewer bonds owned by the Fed and correspondingly more bonds owned by others (banks, investors, other countries).