A stock market correction will probably not prevent the Fed from raising its rates

"By December, the market could resume," said Gus Faucher, chief economist at PNC Financial. "The Fed is looking at the volatility of the markets and says that the underlying economy is good, which is why it should continue to gradually increase rates."

Indeed, Fed Vice President Richard Clarida, regional president Raphael Bostic of Atlanta and Robert Kaplan of Dallas each said this week that more rises were appropriate. But they also said they would continue to review the data and make future decisions based on how the numbers are entered.

"It's more than the market decline. I do not think it disturbs Powell, "said Quincy Krosby, chief market strategist at Prudential Financial. "But if economic data weakens, it will matter to them."

Expectations of a rate hike in December have cooled somewhat in recent days, with a 73.6% probability in December, which remains high. Expectations for 2019 are another topic, with March at a grade below 50-50. The federal funds futures contracts involve a rate of 2.82% by the end of 2019, more than a complete increase over the Fed's current forecast of 3.1%. The current target range is between 2% and 2.25%.

The markets rallied aggressively on Thursday, highlighting another dilemma for the Fed: if it rises too quickly, it could put an end to a strong performance that began in 2017 and, if the wait was too long, inflation could become a problem and impose an emergency tightening.

Fed officials have looked at this balance openly and, at least for now, are more focused on getting ahead of inflation.

"Jerome Powell made it clear that he wanted to arrange a smooth landing, which would be the first," Krosby said. "I do not think this Fed team, which is very experienced, wants to be recognized for dragging the US into a recession."