Visa suspension program at Turkish consulate causing markets to go bidless.  Turkey central bank is trying to intervene, but they do not have the cash.  Will likely see continued declines in the Lira.  Expecting new highs in USD/TRY

Rate hikes and how they've affected market historically:

Four phases of monetary policy

In a recent report by Bank Credit Analyst (BCA) Research they highlighted the four phases of a monetary policy cycle based on the interaction between the level of rates and their direction. Policy is deemed to be easy if the fed funds rate is below its equilibrium level (Phases I and IV), and tight if it's above that level (Phases II and III). You can see the four phases, and the accompanying stock market performance, in the table below.

Source: BCA Research Inc. *Table excludes Phase III (July '95 to September '98) and Phase IV (April '01 to May '04) incidences distorted by the dot-com bubble. If they were included, Phase III's mean and median CAGRs (compounded annual growth rate) would be -4.4% and -1.1%, respectively, over 7 incidences and Phase IV's would be 20.3% and 9.2% over 9 incidences. The 2-month Phase II incidence spanning the October '87 crash (-80% CAGR) has also been excluded.

We have been in Phase IV since January 2008 and will remain there until the first rate hike. As noted by BCA, the durations of Phase IV and Phase I are significant because the level of rates (easy or tight) has trumped their direction (lower or higher) when it comes to explaining S&P 500 returns. In fact, all of the stock market's returns in the past 50-plus years were achieved when monetary policy was easy.

Neutral / Equilibrium fed funds level, not a fixed number but a non-dampening/ non-stimulative rate.  Estimated at 3.5 - 5.5% fed funds rate
https://www.frbsf.org/education/publications/doctor-econ/2005/april/neutral-monetary-policy/

Pullbacks have been mild historically

It is common to experience some volatility and initial pullbacks when moving toward the initial rate hike. In looking at the past five rate hike cycles, the average pullback—nearly always having concluded before the actual first hike—was less than 6%, therefore not even qualifying as a "correction," which is -10%. The magnitude of the pullback was directly tied to the magnitude of the back-up in two-year Treasury yields. So keep an eye on those as we approach the initial rate hike.

Dot plot

2/2018 still in Phase 1, easy / hikinh mode

fred.stlouisfed.org/series/FEDFUNDS  2/2018 = 1.42%

Fed Funds Rate

www.bloomberg.com/graphics/fomc-dot-plot/       2/2018 =     2.75%

Equilibrium Level

Ray Dalio Linked in post:
https://www.linkedin.com/pulse/its-all-classic-main-questions-timing-what-next-downturn-ray-dalio/

In the “late-cycle” phase of the short-term debt/business cycle, when 
a) an economy’s demand is increasing at a rate that is faster than the capacity for it to produce is increasing and 
b) the capacity to produce is near its limits, prices of those items that are constrained (like workers and constrained capital goods) go up. 
At that time, profits also rise for those who own the capacities to produce those items that are in short supply. Then the acceleration of demand into capacity constraints and rise in prices and profits causes interest rates to rise and central banks to tighten monetary policy, which causes stock and other asset prices to fall because all assets are priced as the present value of their future cash flows and interest rates are the discount rate used to calculate present values. That is why it is not unusual to see strong economies accompanied by falling stock and other asset prices...

What we do know is that we are in the part of the cycle in which the central banks’ getting monetary policy right is difficult and that this time around the balancing act will be especially difficult (given all the stimulation into capacity constraints and given the long durations of assets and a number of other factors) so that the risks of a recession in the next 18-24 months are rising. While most market players are focusing on the strong 2018, we are focusing more on 2019 and 2020 (which is the next presidential election year). Frankly, it seems to be inappropriate oversight to not be talking about the chances of a recession and what that recession might look like prior to the next election.