Will interest rates finally go up? Federal Reserve officials begin a two-day meeting today, with the financial world waiting with bated breath on Janet Yellen's subsequent announcement. "Anyone who uses money" will ultimately be affected, observes NPR, which offers a primer here. Other highlights in coverage:
- 'Nail-biter': This one is tough to predict, with some members of the Federal Open Market Committee that is meeting open to a hike and others opposed. "Officials could seek some middle ground, such as holding rates near zero while sending a signal that a rate increase is likely at the Fed’s Oct. 27-28 or Dec. 15-16 policy meetings," notes the Wall Street Journal. "Given the uncertainty, how Ms. Yellen frames what the Fed is doing will be as important as what the Fed actually does."
- A more important question: Everyone's asking will the Fed raise rates, "but there’s another important consideration that isn’t asked nearly enough: Can the Fed raise interest rates?" writes Matt Phillips at Quartz. Things have gotten far more complicated since the last bump nine years ago, and the Fed's real challenge is to show "it still has the market muscle and technical know-how to get rates up and keep them there."
- 'Untested tools': "In normal times, the Fed would control rates by adding or subtracting 'reserves' to the banking system," notes Fortune. "If it wanted to raise rates, it would sell Treasury bills to banks in exchange for these reserves. But after years of quantitative easing, the system has been flooded by reserves, and therefore it must use new and untested tools" to get the job done.