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This might be the worst Fed option

A trader works on the floor of the New York Stock Exchange.
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Whatever the Fed does Thursday will surprise someone, but not taking action could result in the least favorable course for markets since it will prolong the uncertainty.

The drama around this week's central bank meeting is unprecedented in recent memory, and the markets are not pricing in what could be the first rate hike in more than nine years. But history shows global market response may have been better when the Fed actually did hike rates when the rate rise was not expected by markets.

"If the Fed decides to tighten monetary policy, even if it is Thursday, there is a chance they can lower the range of uncertainty on future monetary policy. That may be the best for the U.S. economy. It may not be the best for the world, but it would be best for the U.S.," said Steven Wieting, global chief strategist at Citi Private Bank.