Here's how Wall Street is thinking about the first rate hike now that it's coming this year

By Jonathan Marino

It isn't a matter of 'will they' or 'won't they,' but Wall Street can't come up with much of a consensus as to when the Federal Reserve will increase interest rates.

This hike has the potential to impact everything from student and auto loans to the timing of M&A and activist investor campaigns.

Federal Reserve chair Janet Yellen has repeatedly said that the central bank is expecting to raise rates in 2015.

The Fed will have several opportunities to increase interest rates this year. But the market is focusing on two time frames when an announcement is most likely: September and December.

Some think more time is needed for markets to process higher borrowing costs.

With that debate on, everyone will be hanging on to Yellen's every word on Wednesday and Thursday, when she will deliver bi-annual remarks before the US House of Representatives and the Senate, respectively.

The bi-annual statements are generally referred to as 'Humphrey Hawkins' testimony, named for lawmakers Sen. Hubert Humphrey and Rep. Augustus Hawkins who put in place regulations in the late 1970s that summoned the Fed head to Capitol Hill to brief lawmakers.

Here's how people across Wall Street explained their thinking on the situation on Tuesday:

Big unresolved international factors: "It's not just about the US market, which is doing well," one banker said. "There are big unresolved international factors, including China." He went on to say the Federal Reserve may have to step away from Yellen's assertion that the central bank is ready to raise rates in 2015.
For now, Wall Street bankers could line up big deals. Regardless of when the Fed raises rates, another banker thinks the stage has been set for mega-M&A this summer. The resolution of international issues with the potential to impact US debt markets should embolden lenders and borrowers alike.

Already, Chinese investment firm Tsinghua Unigroup has reportedly pursued a buyout of chipmaker Micron Technology that would become the biggest buyout of a US company by a China entity ever if completed. One banker said Chinese buyers are ramping up acquisition efforts in the US and are willing to pay high premiums.

"[The second half of 2015] will have strong M&A activity," a tech banker said. "Very strong. There is a litany of companies in various sectors ripe for take over."

Investors aren't expecting a rate hike. A top economist who has repeatedly projected a September rate hike says he won't step away from his call. The International Monetary Fund has pushed the Federal Reserve to put off rate increases until 2016.

"A September hike is more likely [than December]," says Deutsche Bank's chief US economist Joseph Lavorgna. However, he added: "Investors are not expecting a September hike."

If that's really the case, then the Federal Reserve's decision could roil US markets whenever it is announced.