Fed Rate Decision Set to Spark Market Volatility

On September 16, the Federal Reserve will announce its decision on short-term interest rates, which could have significant implications for the economy and stock market.

The market has been anticipating a rate hike, with CME Group's FedWatch tool estimating a 60% chance of a hike as of September 8. A rate increase would likely be bearish for stocks like the S&P 500 (^GSPC), Nasdaq Composite (^IXIC), and Dow Jones Industrial Average (^DJI).

However, investors should remain calm, as even if rates are hiked, it will have little long-term impact on stock prices. The bigger concern is the credibility of the Federal Reserve under new Chair Kevin Warsh, who has scaled back traditional practices like providing forward guidance.