(NewsNation) — The market has been wobbly throughout the day Tuesday as investors anticipate the Federal Reserve to announce another increase in interest rates.

Markets have been jittery over whether the Fed’s plan to cool the hottest U.S. inflation in four decades might be too aggressive and throw the economy into a recession by pumping the brakes on growth too hard.

But expectations of the rate hike have already been taken into account, analysts said.

Federal Reserve Chair Jerome Powell bluntly warned in a speech last month that the Fed’s drive to curb inflation by aggressively raising interest rates would “bring some pain.” On Wednesday, Americans may get a better sense of how much pain could be in store.

The Fed is expected at its latest meeting to raise its key short-term rate by a substantial three-quarters of a point for the third consecutive time. Another hike that large would lift its benchmark rate — which affects many consumer and business loans — to a range of 3% to 3.25%, the highest level in 14 years.

NewsNation’s business contributor Lydia Moynihan called it a “showdown of the economic saga” that has been covered this entire year. She said there are three main scenarios to be aware of that could play out as the Fed meets Tuesday.

“The first is that the Fed continues to hike rates so aggressively that it actually pushes the U.S. into a recession, where investors will see sort of this economic cooldown across the board,” she said. “The second scenario is sort of the one we’ve been experiencing where the Federal Reserve keeps hiking rates, and yet inflation is still surging.”

She explained that’s what the market has been seeing the past few months: the Fed has been aggressive in hiking interest rates. And yet, inflation continues to skyrocket.

“And then the third scenario is the one that we’re hoping for. It’s sort of this Goldilocks scenario where the Feds are able to thread the needle and raise those rates enough to tame inflation without pushing us into a recession.,” Moynihan said.

But regardless of the scenario, investors will be seeing a dramatic spike from just 2% interest rate a few years ago. Now, investors are looking at mortgage rates north of 6%.

“So even though we’re hoping for this sort of Goldilocks scenario, even that in the short term is very painful for borrowers,” she said.

The Associated Press contributed to this report.