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These 5 things will help you understand this week’s big Fed meeting

Federal Reserve Chair Janet Yellen Delivers Semiannual Report On The Economy To The Senate Banking CommitteeFederal Reserve Chair Janet Yellen Delivers Semiannual Report On The Economy To The Senate Banking Committee
Janet Yellen, chair of the U.S. Federal Reserve.Photograph by Bloomberg via Getty Images

The Federal Reserve’s two-day September meeting will begin on Wednesday. During the meeting, Fed officials will decide to either raise interest rates for the first time in years, or delay that move for several more months.

While we’re all patiently awaiting the final decision to be announced on Thursday, here are five articles to help you better understand the situation.

1. Bloomberg outlines an argument in favor of raising interest rates:

This would generate at least a trillion dollars annually, if not more, for fixed-income investors — and a possible boost of 6 percent to GDP. The average American wouldn’t likely suffer, because credit-card interest rates still average 13 percent and, given a likely flattening of the yield curve, mortgage rates would barely increase.

2. The Washington Post argues the opposite:

Monetary policy should seek to avoid major surprises. Right now the fed funds futures market is assigning only a 28 percent chance to a September tightening. In the last 20 years, the Fed has never tightened without guiding the futures market to at least a 70 percent chance of a tightening. So a move now, given how expectations have been managed, would be an extraordinary shock at a highly uncertain time.

3. Fortune reports that, historically speaking, a rate hike is unlikely to happen this week:

A Bank of America report on Wednesday stated that the Fed has never raised interest rates during times when the market has been as rocky as it has been lately. And China’s slowdown is also worrying some central bank officials.

4. Quartz stresses that it’s been a long time since the Fed has raised rates, complicating the process:

And in the near decade since then, pretty much every rule, technique, and guideline the Fed once relied on has been drastically rewritten, revamped, or removed. That blank slate underscores the fact that seven years after the financial crisis, the U.S. economy continues to feel the reverberations.

In the words of one analyst, when the Fed tries to raise interest rates “their actions will entail the largest monetary policy experiment in human history.”

5. The Wall Street Journal reports that stocks have fallen in European, Asian, and U.S. markets this week, possibly due to uncertainty over the Fed’s move:

The Dow Jones Industrial Average fell 62.13 points, or 0.4%, to 16370.96 and the S&P 500declined 8.02 points, or 0.4%, to 1953.03. The U.S. 10-year Treasury note edged down to 2.181% from 2.183% on Friday.