Pack the trail mix. A Fed interest-rate hike is coming.

With dramatic improvements in stock and bond markets and some market-specific lift in housing, we can only assume the Fed is preparing an interest-rate hike.

Manuel Balce Ceneta/AP
Federal Reserve Chairman Ben Bernanke testified on Capitol Hill this part Thursday about unwinding emergency liquidity programs. It's time to prepare for an interest-rate hike because it's coming.

Worried about the eventual rate hike? You're not alone.

I see Fed People.

I see that beard with every buy ticket I drop. I hear Hampton Pearson's voice reporting live from a future FOMC day. If I scrunch my eyes up just right, I see the Octobox - populated with the likes of Bill Gross and Larry Kuddles and, inexplicably, Don Luskin.

Because it will come. And at least initially, it will not be reacted to very well in the stock market. The "if" is off the table, the "when" is the only real question.

The rotors of Ben's helicopter can still be heard beating away somewhere up in the sky above us. Most of the emergency accommodation is still in place, very little of it has been sunsetted as yet. But if you listen ever so gingerly, you will begin to hear the sound of the liquidcopter begin to fade.

The statement language may or may not have changed much, but asset values have. And as we have learned the hard way, the Fed is very much fixated on asset values - this began under Easy Al and Bernanke has continued many of his predecessor's policies. With dramatic improvements in both stock and bond markets along with some market-specific lifting of housing prices, we can only assume that the committee is at least preparing for the inevitable.

So pack some trail mix just in case, because there will be a hike. Maybe not soon, but soon enough.

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