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Fed rate hike to cause pain. Suck it up: Richard Fisher

An interest rate hike will surely cause market pain, but the Federal Reserve should get it over with, former Dallas Fed President Richard Fisher said Wednesday.

"I would be prepared when they move — and I hope they move some time in June — there'll be a settling in of the market place. There will be a correction. Suck it up. Deal with it. That's reality," he told CNBC's "Squawk on the Street."

Wall Street does not expect the Federal Open Market Committee to raise interest rates at the close of its two-day meeting on Wednesday afternoon, but investors will be listening for clues about rate hikes when the Fed releases its statement.

Fisher said the Fed has been unwilling to tighten monetary policy because it fears the potential resulting market volatility and economic weakness.

"The Fed has the markets on Ritalin, trying to keep the mood very smooth, keep volatility down as much as possible. As soon as they hint that they might remove that, then they create the problems that they're afraid of," he said.

The real economy is doing much better since the Fed's last meeting in March, Fisher said, noting that Argentina has returned to international bond markets, Chinese data looks better and demand for British bonds is strong.

"These are very robust markets. I would take advantage of that right now," he said.

Correction: This story was updated to reflect that investors will be listening for clues about rate hikes when the Fed releases its statement.