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The Federal Reserve will increase interest rates twice in 2015 starting in September, followed by five hikes next year, according to a new Credit Suisse report.

Although a September rate hike could knock 10 percent off the market initially, stocks tend to rise in periods of rate tightening, the report said.

Credit Suisse's Carlos Pro estimated how wage inflation, the dollar's value in currency markets, inflation expectations, and other factors are likely to influence the Federal Open Market Committee's dot plot.


"We think that these variables are relevant," Pro wrote in a larger report.

Although stocks tend to rise during periods of interest-rate hikes, Credit Suisse's Lori Calvasina said in the same report that "lift-off" creates initial turbulence.

Historical Data

Looking at historical data, Calvasina said initial tightening moves by the Federal Reserve in the past have resulted in a 10 percent drop in the Standard & Poor's 500 Index and a 13 percent decline for the Russell 2000.

Software, health care, retailing and utilities, as well as food, beverages and tobacco could all underperform, Calvasina said.

But banks, financials and professional services could benefit from rising rates, according to Calvasina, who based her analysis on a look at initial Fed rate hikes in cycles beginning in 1994, 1999 and 2004.

The Federal Reserve policy statement expected later Wednesday will include a reiteration that if the economy improves as expected, interest rates could rise later this year, Credit Suisse's Dana Saporta said in the report.

The statement, from the FOMC, will acknowledge an improving economy.

"But the rebound is still building momentum and has not been sufficiently conclusive" to result in a June rate hike, Saporta said.

"September still appears the most likely date for policy lift-off," according to Saporta.

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