“It will be contentious,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore and a former Fed economist. “There are big differences of opinion.”

FOMC Divided

The committee is divided between those who believe rates need to be increased this year—and maybe more than once—to reflect momentum in U.S. growth, and those who believe “neutral” rates are so low that risk-management considerations dictate a more cautious approach, Wright said.

The neutral rate of interest is the level that neither spurs nor slows the economy. The FOMC has already lowered its estimate of where the long-run rate lies, to 3 percent in its June quarterly forecast from 3.75 percent a year earlier. Some officials say it could be even lower.

Wright expects Kansas City Fed President Esther George, who dissented against decisions in March and April to leave rates unchanged but endorsed the same decision in June, to resume advocating for higher rates this week.

George may have some company in arguing that a move is warranted. Directors at six of the 12 regional Fed banks voted in favor of a discount rate increase prior to the June 14-15 FOMC meeting, including St. Louis, Boston, and Cleveland, all of whose presidents are policy voters in 2016.

The first paragraph of the FOMC's post-meeting statement is most ripe for revision, according to Thomas Costerg, a senior U.S. economist at Standard Chartered Bank in New York.

The June statement noted that “the pace of improvement in the labor market has slowed” and “job gains have diminished,” but that was before a Labor Department report, released July 8, showed employers added 287,000 workers to payrolls in June following net job creation of just 11,000 in May.

“The statement will probably show a better characterization of growth on the back of strong retail sales and job growth,” Costerg said.

Suspense over Fed Statement

Beyond that, the question is whether Fed officials can agree on whether it's appropriate to nudge investors further in the direction of anticipating a rate increase at the next FOMC meeting in September, said Ken Matheny, a senior economist at Macroeconomic Advisers LLC in St. Louis.

While various regional Fed presidents have weighed in on the policy debate in recent weeks, Yellen has not spoken publicly since the June 15 FOMC press conference. Her next public speech is on Aug. 26, at the Kansas City Fed's annual policy retreat in Jackson Hole, Wyoming.

Prices of futures contracts linked to the benchmark federal funds rate suggest the chances of a September hike are roughly one in four.

In April, the FOMC refrained from inserting language into the statement that would indicate a bias toward an increase at its next meeting, even though minutes of the April meeting released three weeks later showed that some officials believed investors weren't taking the possibility seriously.

One way the committee could signal an intent to move would be by providing an assessment of the balance of risks to the economy. That language was conspicuously dropped by the FOMC from its January statement after financial-market turmoil and a dimmer outlook for global growth intensified the headwinds confronting U.S. job creation and inflation.

“There is a little bit of suspense with the upcoming statement,” Matheny said. “I suspect the committee will be in a roughly similar position, hesitant to characterize the risks as balanced.”

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