In the Event the Fed Raises Interest Rates

The Federal Reserve raising rates would cause an ugly day in stocks.
Publish date:

In all likelihood the Federal Reserve will not raise interest rates Wednesday. 

But what if the Fed does raise rates? 

"It would be the equivalent of Armageddon in the middle of the trading day," said Danielle DiMartino Booth, former adviser to the president of the Dallas Federal Reserve. "It would not bode well," she added. 

Moreover, even if the Fed does not raise rates, stock investors will still be listening closely to the words of Federal Reserve Chairman Jerome Powell. The market is hoping to hear the word "pause," an indication that there will likely be zero rate hikes in 2019, according to DiMartino. If Powell uses the word "gradual" too much, indicating that the central bank may still raise rates at some point in 2019, stock investors could become immediately fear stricken, DiMartino said. 

For more on the Federal Reserve's decision, see what DiMartino has to say about the more likely scenario here