How will the reduction in FED 4.5T affect the real economy?

US Fed has USD$4.5T of balance sheet which composes of $2.46T of bonds and $1.77T of mortgage-backed securities (MBS).

As the MBS are mostly longer dated derivatives of at least 10 years, FED won't unwind these MBS in the short run.  Therefore, FED will just let the shorter dated bonds expire and won't reinvest the proceeds into the bond market.  About 50% of the bonds will expire within the next 5 years which amount to USD$1.2T and this means the money market will have a capital outflow of $1.2T.  Furthermore, USA will hike interest rates for the next few years as stated by FED which is tantamount to price hikes in the real economy.  The higher interest rates will cause USD to appreciate so that the purchasing power won't be eroded.  In other words, inflation can be contained in this way.

To surmise, the reduction in money supply and interest rate increments will cause USD to appreciate in the next few years.