As it does once each quarter, the Federal Reserve will deliver a triple-dose of news Thursday afternoon — a policy statement, economic forecasts and a news conference by Chairwoman Janet Yellen. But all eyes will be on one question:
Is the Fed raising interest rates from record lows?
Economists remain unsure, though the consensus seems to have shifted against the likelihood of an increase in the Fed's benchmark short-term rate. Turbulence in financial markets, persistently low inflation and risks to the global economy from China's sharp slowdown could lead the Fed to delay a hike until December or later.
Beyond that blockbuster decision, Fed watchers will be looking for other significant nuggets in the stream of information that will emerge Thursday.
Here are five things to watch for:
The biggest news, of course, is whether the Fed will announce in a statement at 2 p.m. that it's raising its target for the federal funds rate — the interest that banks charge each other on overnight loans. Back in 2008, the Fed slashed this rate to a record low near zero, where it's remained since, through more than 50 Fed policy meetings. In keeping the rate that low, the Fed has tried to bolster the economy's recovery from the worst downturn since the 1930s.
Fed Vice Chairman Stanley Fischer has suggested that when the central bank does move, the increase will be a modest quarter-point hike, from a range of between zero and 0.25 percent to a range of between 0.25 percent and 0.5 percent. This is the rate banks charge each other for overnight loans. But it influences other rates throughout the economy.
Traditionally, the Fed has sold Treasurys to the banks as a way to shrink their reserves and raise rates. But with the banks swimming in reserves from all the cash the Fed has pumped into the financial system, the central bank plans to use additional tools to boost rates.
These include raising the interest it pays banks on their reserves. This would push bank lending rates up because banks won't be willing to lend at lower rates than they're receiving from the Fed.
Pace of a rate hike
Yellen and other Fed officials have stressed that whenever they start raising rates, they will do so very incrementally. The goal is to assess the impact of a slight rate hike before going further. In doing so, the Fed would try to avoid derailing the economy or spooking investors.
Some have speculated that the pattern of rate hikes will be four quarterly increases of a quarter-point each. If that held true and if the Fed began the process Thursday, the funds rate would equal a range of 0.75 percent to 1 percent by mid-2016 — still low by historical standards. Consider that 1 percent was the previous record low for the funds rate reached in June 2003.
The rate stayed at that level until June 2004, when the Fed began its previous round of rate hikes. Look to the Fed's policy statement and Yellen's remarks at her news conference for any clarity on the pace of rate hikes.
Jobs and wages
At their most recent meeting, the Fed's policymakers said the job market had to show only "some further improvement" for them to consider raising rates. Previously, they had said they needed to see "further improvement." The addition of "some" was seen as a signal that the job market was closer to satisfying the Fed. Unemployment has reached a seven-year low of 5.1 percent, within the Fed's stated target of 5 percent to 5.1 percent.
But the Fed's standards for a healthy job market go beyond the unemployment rate. The policymakers regard the proportion of adults who are either working or looking for work as too low. And the number of part-time workers who would prefer full-time jobs remains unusually high. Pay growth for workers has been generally meager, too. A more nuanced picture of how the Fed views the job market could emerge from its policy statement and updated economic forecasts or from Yellen's comments to reporters.
In contrast to employment, the Fed is much further from achieving its other mandate: Maintaining price increases of around 2 percent. Its preferred measure of inflation, excluding volatile food and energy, has risen just 1.2 percent over the 12 months that ended in July and has stayed below its 2-percent goal for more than three years. A rise in the dollar's value and declines in energy prices have further depressed inflation.
The Fed has been saying it doesn't want to start raising rates until it's "reasonably confident" that inflation is moving back to its 2-percent target. Last month, Fischer said his confidence was "pretty high" because of his belief that lower-priced energy and a higher-priced dollar were temporary factors that would eventually fade.
The Fed might clarify its inflation views in its policy statement or through the inflation forecast in its updated economic projections. In June, the Fed predicted that inflation, excluding energy and food, would be near 2 percent by the end of 2016.
If that expectation holds, it would signal that the Fed's confidence in moving toward its 2 percent inflation target hasn't been shaken.
Yellen, of course, is the most important voice on the Fed, and she hasn't spoken publicly in two months. Since then, China has devalued its currency, inciting fear that troubles in the world's second-largest economy were worse than previously thought. Some worry that a severe slowdown in China's economy would chill growth in the Unites States and other economies.
Partly as a result, Wall Street and other financial markets around the world have endured a nerve-rattling streak of turbulence and sinking prices this summer.
How are all these developments shaping the Fed's decision-making? Yellen's remarks at her news conference may shed some light.