The Federal Reserve's first interest rate hike in nearly a decade could boost stocks, at least initially, a study says. (AP Photo/J. Scott Applewhite)

The Federal Reserve's first interest rate hike in nearly a decade could boost stocks, at least initially, a study says. (AP Photo/J. Scott Applewhite)

Wall Street is hotly debating whether the Federal Reserve will boost interest rates when it meets later this month and bracing for the fallout once it happens.

Friday's August jobs report didn't appear to clear up what the Fed is going to do. Now the focus shifts back to the Sept. 17, when the Fed will announce any policy change.

So maybe now is a good time to check out what happened the last time the Fed raised rates.

It happened on June 29, 2006. The central bank raised the federal fund rates a quarter percentage point. That's exactly how much it is expected to boost rates when it finally pulls the trigger this time.

So how did the markets react that day? In the case of stocks, quite well. The Dow Jones industrials gained 2.0% to 11,191, the S&P 500 added 2.2% and the Nasdaq composite jumped 3.0%.

But things were a lot different then. First of all, the stock market was a lot lower than it is now — 4,900 points lower in the case of the Dow.

Another key difference: That 1/4-point hike was the 17th time the Fed had raised interest rates in that cycle, and it lifted the fed funds rate to 5.25%. Currently, the Fed funds rate is close to 0%. And the next rate increase will likely only be the first of many.

Follow USA TODAY's David Craig on Twitter @davidgcraig