The stock market could do something strange this week after the Fed decision

This week, the stock market could do something unusual: rally on a rate hike. Wall Street is expecting that the Federal Reserve will raise rates this week after Chairman Kevin Warsh 's tough speech against inflation at Jackson Hole last month was followed by a series of hot inflation reports , a spike in oil prices , and a surge in expectations for a quarter-point increase. The market is now pricing in a 90% likelihood that the federal funds rate — which serves as a baseline for other borrowing costs such as mortgages — will rise to 3.75% to 4.00% following Wednesday's decision, according to the CME FedWatch Tool . The probability of two more increases coming, in October and December, have also spiked, fed funds futures pricing shows.