What Happens at 2pm on Wednesday?

The Fed will release their next announcement at 2pm ET today. Nearly everyone agrees that they will make their next quarter point rate hike given past statements...given the improving state of the economy...given the increase of inflation towards their target levels.

So, what happens if they don't raise rates?

Yes, that would be the more shocking outcome at this stage of the game. And likely it would be met with a stock sell off. That is because the only logical way for investors to read that outcome is for the Fed to have a lack of faith in the economy.

That pinch of pessimism just doesn't jive with a bull market pressing all time highs. However, I think that any forthcoming dip would be shallow and short lived.

Adding it all up, expect a rate hike and bull market to stay on track. But if they do surprise us with a lack of action, then you are prepared for what happens next.

Best,

Steve Reitmeister

Executive Vice President, Zacks Investment Research

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