Could the Fed convene a surprise meeting to hike interest rates? The markets are beginning to price it in, and it’s walloping stocks

Mere hours after yesterday’s CPI—a.k.a., the consumer price index, or the measure of how much more Americans are paying for everything from toilet paper to jeans to a 2016 Mazda CX-5—showed a bigger-than-expected inflation print, some big names started to openly discuss a break-the-glass solution to cool down the economy and stifle price rises.

Rates hawk James Bullard, president of the Federal Reserve Bank of St. Louis, got the ball rolling yesterday. He told Bloomberg, “I’d like to see 100 basis points in the bag by July 1,” a statement that helped knock more than 500 points off the blue-chip Dow Jones industrial average on Thursday, and sank the Nasdaq by more than 2%. Futures on the tech-heavy index are trading lower again on Friday, premarket, and Europe and Asia are awash in red this morning.

Were the Fed to raise the prime lending rate by one full percentage point by midsummer, as Bullard would like, the central bank would need to make some aggressive moves between now and then. One scenario getting further attention this morning: scheduling an inter-meeting rate-setting session of the Federal Open Market Committee (FOMC) to cool off consumer prices and put the squash on wage gains.

As Deutsche Bank points out this morning, the Fed hasn’t gathered its troop of central bankers to raise rates at a special inter-meeting session since 1994. The investment bank sees such a prospect as “a small possibility,” but others are not so sure it’s all that remote.

Tim Duy , an economist and Fed watcher at SGH Macro Advisors, is so worried that the Fed is behind the curve that, he says, a surprise Fed meeting should be in the cards as soon as today or Monday. “I know, this is crazy aggressive,” he rationalizes in a note, picked up by the Wall Street Journal.

In an overnight note to investors, Goldman Sachs chief economist Jan Hatzius said he also sees “a more aggressive and meaningful response” coming from the Fed, but he thinks the bazooka they plan to fire will be a 50 basis point rate hike at the March FOMC meeting. That, he said, “would be more likely than an inter-meeting hike.”

In any case, a decisive monetary policy move is needed, he argues, to derail the “very firm” inflation trend. As such, Goldman is now forecasting seven rate hikes this year—up from its prediction of five.

A more hawkish Fed is sending ripple effects through the markets. That the central bank would begin raising rates as soon as March was no surprise to investors. But the prospect of the Fed playing catch-up to bring inflation under control was seen as remote by equities bulls as recently as a few days ago.

Typically, unprofitable growth stocks underperform when the Fed begins tightening rates. Small-caps, too, tend to struggle—well, at least those with “weaker balance sheets, lower profit margins, and less market power,” Goldman’s David J. Kostin warned investors late last week.

On cue, investors are turning their attention to safe-haven assets. The dollar is up strongly, and long-rated Treasuries are rebounding. Bitcoin, along with other cryptocurrencies, is faltering in morning trading in Europe.