If the Fed announces a September rate hike on Wednesday, investors better brace themselves for what could come next, says one market watcher.
"Every time the Fed has removed accommodation, whether it was the end of QE or last December's rate hike, the market had a tantrum," Peter Boockvar, chief market analyst at The Lindsey Group said Tuesday on CNBC's "Futures Now." "I'm not going to think that this is going to be anything different."
Last time the Fed raised interest rates was in December 2015. The S&P 500 proceeded to drop more than 9 percent in the next month off of the rate hike.
While the markets have stayed in a tight range over the last several months in spite of big events like Brexit and poor earnings, Boockvar warns that may not be the case this time around.
"The equity market has not cared about the trajectory of earnings, which is going to be negative for six quarters in a row," he said. "It hasn't cared about the trajectory of the economy, which is running at a 1.5 percent pace."
"It's only cared about a suppression of interest rates," explained Boockvar. "So any reversal of that, whether it's from the short end or the longer end, I think we're going to have another tantrum."
Boockvar is also keeping an eye on the potential fallout from the Bank of Japan meeting, which he believes will actually have more sway on global bond yields than the Fed meeting.
The Fed will announce its decision on Wednesday at 2 p.m.