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Fed's done, now traders look for Santa rally

Santa Claus rally on the way: Pro

The Fed surprised markets by turning the first rate hike in nine years into a relative nonevent for markets.

"I think the market pretty much had a lot of it built in. There were no surprises, which I think is a good thing. Now we can stop worrying about when we're going to get a rate hike because we already had that now," said Randy Frederick, managing director, trading and derivatives at Charles Schwab. "I've said I thought there was a good chance we could have a solid two week rally into the end of the year."

The Fed had convinced markets that it would raise rates by a quarter at its December meeting and continue to deliver a relatively dovish message about the future path of rate hikes. It did both Wednesday afternoon, ending seven years of a near-zero fed funds rate.

"It took them long enough. It took from September to now to turn it into a non-event," said John Briggs, head of strategy at RBS. The Fed surprised some in the markets when it held off on a rate hike in September because of concerns about financial conditions and international developments.