The S&P 500 rose 0.9% and the Nasdaq was up 0.7%.
"It means the rate hike is going to happen. Is that good news? The market thinks it is," said Peter Tuchman, a trader on the floor at New York Stock Exchange, on CNN Business' Markets Now live show with CNN Business editor-at-large Richard Quest Wednesday.
That might be good news for stocks, which priced in a steady stream of rate hikes next year. The Fed raised rates three times this year — Wednesday would make four. But a slower pace of rate hikes in 2019 would not necessarily be great news.
The Fed may want to slow its rollout if the economy begins to soften. Signs of an economic slowdown are starting to become apparent in the housing market, corporate outlooks and commodities markets.
"It does open the door to a slower pace of increases, which translates into a more patient Fed," said Lindsey Piegza, Stifel chief economist, on Markets Now.
Piegza noted that the housing market has been particularly soft. She called attention to the fact that homebuyers are using more credit than historical norms to purchase their houses. That signals pay increases haven't quite taken hold the way economists hoped they would during the past decade's economic and job boom.
That, combined with other warning signs, calls into question whether the Fed should raise rates as strongly in 2019 as it did in 2018, Piegza said.
Still, Piegza predicts the economy will avoid a recession in 2019. Momentum will slow, however. She thinks the US economy will grow in a range of 1.5% to 1.8% next year, and it will probably enter a recession in 2020.
Lindsey Bell, CFRA Research Investment Strategist, will join Quest to discuss the Fed's meeting and the stock market on "Markets Now" Thursday.
"Markets Now" will stream live from the New York Stock Exchange at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.
You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.
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