OK, so the Fed begins to unwind. What happens next?

[Mark F.]

It looks like the Fed may finally begin unwinding it's massive balance sheet, which rose from less than $1 billion before 2008 to over $4.5 trillion(!) today. The Fed bought up huge amounts of gov't bonds, mortgage-backed securities, corporate bonds, etc. to support the economy in the aftermath of the 2008 financial crisis.  

If the Fed starts offloading the securities on it's balance sheet, that should lead to higher interest rates for credit cards, mortgages, etc., right? It also could contribute to declines in the stock market. 

However, I know that investors will often flee to "safe haven" assets such as gov't bonds as the stock market falls, which means the Fed could potentially sell bonds into strong demand, which may not impact interest rates as much as one might think.  

There's obviously a ton of uncertainties here, but I would love to hear the opinions of others about how all this might shake out. What do you think will happen with interest rates, the stock market, real estate values, etc., as the Fed continues to increase rates and unwind it's balance sheet?