June 30, 2004 -- With the Fed set to raise interest rates today, a new group of investors stands to have its day.

For the first time in four years, the Federal Reserve is widely expected to hike its benchmark funds rate today from a 46-year low of 1 percent to 1.25 percent.

The markets prepared for the likely rate hike yesterday with a solid session that saw the Dow Jones industrial average climb 56.34 to 10,413.43 and the Nasdaq pop 15.11 to 2,034.93.

Beyond stocks, though, the Fed's announcement is likely to usher in a new era for monetary policy - and, with it, a different set of winners and losers.

Retirees, who often live off interest from their investments, stand to gain plenty. With interest rates at rock-bottom levels, these folks have seen only slim proceeds from investments in savings accounts, CDs and money market funds.

But as rates start to move higher, retirees are all but certain to ring up better returns.

"The environment of the past is going to see a 180-degree turn," said Greg McBride, a financial analyst with BankRate.com. "Rising interest rates are going to give back to savers what has been lost over the past several years."

According to the Fed, there is currently $5 trillion in CDs and money market funds. "If savings rates go up two percentage points, we could see a $100 billion increase in interest income," said Tony Crescenzi, a strategist at Miller Tabak.

While savers may be ready for a big win, the losers in a higher interest rate environment are plenty.

First in line are the borrowers, who for years got huge benefits from low interest rates and will now be giving some of that back.

Already, 30-year mortgage rates have ticked up from 5 percent in March to 6.25 percent in June, according to lending giant Freddie Mac.

"Right now, there is a lot of concern among people applying for mortgages," said Bob Moulton, president of the Americana Mortgage Group in Manhasset. "Homeowners are definitely going to be on the losing end of the rate increase."

Those with exposure to credit-card debt or short-term auto loans will also pay a higher price.

"Those rates have already moved up, and will continue to do so once the Fed pulls the trigger," said Peter Kretzmer, an economist at Bank of America.