It's the most important day of the year.

Related in some way to what Fed Chair Janet Yellen could say this afternoon at the press conference after the FOMC statement has been released, maybe it could be not such a bad idea for long-term investors looking back for a moment to what she said in June 2006 when the FOMC raised for the last time the Fed funds rate by 0.25 percent to 5.25 percent in its “tightening cycle” at that time and that started in June 2004.

Here’s what Yellen said in June 2006 (She was at the time President and CEO of the San Francisco Fed): “So although on purely economic grounds I’d prefer to pause at this meeting, I certainly recognize that it would be difficult to leave the stance of policy unchanged at this time. In general, I believe that we should do the right thing, even if it surprises markets, but in this case our public statements seem to have convinced the public that we will raise the funds rate today. If we didn’t follow through, there would likely be some loss of credibility for policy. Moreover, as I’ve indicated, I see today’s call as an exceptionally close one between firming and pausing. Therefore, I can certainly support another increase in the funds rate of 25 basis points today.”

Thereafter, in September 2007, the Fed started cutting the Fed funds rate by 0.50 percent to 4.75 percent. That cutting cycle went on till December 2008 when the Fed funds rates ended finally up at the range of 0.0 percent – 0.25 percent, where they have remained till today, and which has been their lowest level since 1971, which is as far the Fed’s public available data go.

We could add here some excerpts of the Fed’s press release of December 16, 2008 wherein is stated: “The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 0.25 percent …. labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined.  Financial markets remain quite strained and credit conditions tight.  Overall, the outlook for economic activity has weakened further.”

No doubt, the overall situation in the U.S. has improved substantially since then, which in itself should give us all a serious warning sign, at least in my opinion, that the Fed’s “abnormal” (too) long stretched period of easy monetary policy can’t go on forever.

Since the Fed hiked for the last time in June 2006 and thereafter we got the Global Financial Crisis of 2008-2009 (The worst financial crisis since the Great Depression of the 1930s) that caused the Fed to apply a close to zero interest-rate policy (ZIRP), today we are permitted to say the U.S. economy is performing rather well.

All this has had its consequences of which borrowers and investors (equities) have benefited, but on the contrary, savers that had their money in bank savings like CDs or in corporate bonds have seen their returns dramatically being curtailed.

All that said, the Fed saga isn’t over yet, not by a long shot.

As for to where markets, currencies, commodities, etc. could be headed over the near term, a lot will depend of what will be said or not said today.

Nevertheless, one of the main question marks that will remain for some time to come will be “where will the dollar go?”

In this context we should not overlook the fact the world needs a weaker dollar because that’s in today’s world about the only thing that could help, albeit only in part, the world economy growing at a somewhat better pace.

Now, we shouldn’t err in thinking a Fed rate hike implies per se a stronger dollar.

When we look at the last six Fed tightening cycles it’s a fact the dollar actually weakened during the 1986, 1994, 1999 and 2004 hiking cycles, but strengthened during the 1983 and 1988 cycles.

It all could become interesting in case the Fed chair should talk about the dollar during her press conference.

Knowing the dollar is on the Fed’s radar screen it’s also a fact that recent strength of the dollar has been dramatic for important emerging market currencies like the Russian ruble, the Brazilian real, the South African rand, the Turkish lira and the Indian rupee who have all started to really deteriorate since mid-2014, which isn't of help to anybody.

Let’s hope the Fed makes us a little wiser today, which is of course not a sure thing.

Etienne "Hans" Parisis is a Belgian-born bank economist who has advised global billionaires and governments on the financial markets and international investments. To read more of his articles, GO HERE NOW.