Wall Street Today | The Fed is Likely to Hike Rates by a Quarter Point Wednesday but It Must Also Reassure It Can Contain a Banking Crisis

The Fed is expected to raise interest rates Wednesday by a quarter point, but it also faces the tough task of reassuring markets it can stem a worse banking crisis.

Economists mostly expect the Fed will increase its fed funds target rate range to 4.75% to 5% on Wednesday afternoon, though some expect the central bank could pause its hiking due to concerns about the banking system. Futures markets were pricing in a roughly 88% chance for a rate rise, as of Tuesday afternoon.

Treasury Secretary Janet Yellen said on Tuesday the US government could repeat the drastic actions it took recently to protect bank depositors if smaller lenders are threatened.

The founder and chief executive officer of ARK Investment Management said Tuesday that she has over $2 billion in losses from selling stocks during the market rout. By selling stocks at a loss, those losses can now lower, and potentially offset the tax bill Wood's funds could receive on future capital gains.