The Federal Reserve’s job hasn’t been easy amid this year’s economic volatility.
The Consumer Price Index, a key inflation gauge, rose 8.3% year over year in August — well over the Fed’s 2% target. The stock market hasn’t been well-behaved either: The S&P 500 index is down by more than 10% so far this year.
The Federal Open Market Committee is due to meet Sept. 20-21, when it will decide whether to raise interest rates for the fifth time this year — and by how much.
Here’s what economists and a financial planner have to say about what’s going into the decision, how the stock market might react, and what it means for long-term investors.
Why is the Federal Reserve raising interest rates?
In short, the Fed is considering raising interest rates again to reduce inflation. But it’s trying to do so in a way that doesn’t burden consumers and businesses.
According to Terrance Grieb, a professor of finance at the University of Idaho, the Federal Reserve’s operations follow…
This article was written by Sam Taube and originally published on www.nerdwallet.com