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Here’s what the market did the last two times the Fed raised rates

While the vast majority of market watchers expect the Federal Reserve to hike rates on Wednesday, all eyes will be tuned to the stock market's reaction to the decision and the central bank's forecast for future rate increases.

The last time the Fed raised short-term interest rates, stocks rallied. On Dec. 16, 2015, when the Fed boosted rates by 0.25 percent, the S&P 500 rose 1.45 percent, while the Dow Jones industrial average climbed 1.28 percent. The enthusiasm was short-lived, however, and the S&P sank more than 11 percent by mid-February.

The 2015 rate hike marked the first time in more than nine years that the Fed decided to boost the range for its key rate, which currently stands at 0.25 percent to 0.50 percent. Before that, the Fed last raised rates in June 2006. Markets also rewarded the news then, with the S&P jumping 2.2 percent and the Dow rising 2 percent, as the Fed strongly hinted that its long string of 17 rate hikes could be coming to a close.

Markets surged even higher when the Fed first embarked on its zero-bound policy on Dec. 16, 2008, in response to the financial crisis. That day, the S&P 500 spiked 5 percent and the Dow jumped 4.2 percent. The Fed would go on to maintain this low rate policy for the next seven years as the U.S. struggled to recover from the Great Recession and regain its economic footing.

The Fed will release its decision at 2 p.m. ET, with the markets widely pricing in another quarter percentage point increase. To see the latest market reaction to the decision, check back here.