The most anticipated economic event of the year is almost here — here’s what could ruin it

For a second year in a row, markets are obsessed with when the Federal Reserve will raise rates.

No one knows whether the announcement will come after the meeting on September 21, November 2 or December 14, or at another time.

On Friday, the final jobs report before the Fed’s upcoming meeting was “fairly uneventful” and not good enough to prompt a rate hike, Carl Tannenbaum, chief economist at Northern Trust, told Business Insider.

The US economy added 151,000 jobs in August, the unemployment rate was unchanged at 4.9%, and average hourly earnings growth slipped one-tenth to 0.1% for the month. The pace of job creation slowed down after two strong months, although there are seasonal adjustment issues that have plagued the initial August jobs reports every year since 2010.

Many other people agree with Tannenbaum. Ethan Harris, chief economist at Bank of America Merrill Lynch, stood by his call for a December rate hike in a note after the jobs report. Also, traders who bet on future interest rates with fed fund futures pared their wagers for September, and raised those for December with a 60.3% probability.

But Goldman Sachs’ Jan Hatzius, the chief economist, told CNBC that September is “a little more likely than not” after the jobs report.

The timing remains uncertain. Most economists have ruled out the Fed’s November meeting because of the election.

Jeff Kleintop, chief global investment strategist at Charles Schwab, thinks December is likely.

And he’s identified a few risks that could put the Fed on hold into 2017.

The most recent big global shock to markets was the UK’s referendum in June that ended with a vote to leave the European Union.

Markets may soon panic about another EU member, this time, Italy.

The country is set to vote this fall on constitutional reform. An affirmative vote would make it easier to pass laws because the Senate would have less control.

Kleintop said recent polling results are starting to go in the “no” direction, which could prompt Prime Minister Matteo Renzi to resign, and raise concern about whether another country will leave the EU down the road.

Italy’s economic growth has trailed EU peers like Germany and France, prompting questions about how much it benefits from membership. And while the upcoming vote is not exactly like the UK’s “remain” or “leave” referendum, it could be seen as the start of a snowball in that direction.

Global purchasing manager’s indexes reflected a slowdown in manufacturing in August.

The Institute of Supply Management’s PMI showed that US manufacturing contracted in August for the first time since February; the outsized services sector has not entered contraction since 2010.

Internationally, however, a slump in demand could be damaging to growth.

In the US, companies are entering the pre-announcement season for earnings. Kleintop does not think disappointing guidance would have a huge impact on the Fed, but it could certainly affect how markets perceive companies’ ability to withstand a rate hike.

Another domestic concern is the presidential election.

“It’s very rare that there will be a blowout,” Kleintop said. “We could see polls tighten pretty close here, and that uncertainty could cause some volatility in the markets.”

He added that during the past ten elections, the loser in the Gallup poll in October has ended up winning the election a number of times. A poll showed on Friday that 61% of national adults viewed Republican nominee Donald Trump unfavorably, versus 57% for Hillary Clinton.

Again, the Fed may not pay attention to the polls, but to how markets react respond to them in the coming months.

Tannenbaum pointed out a few things from the Fed’s July meeting minutes showed it was already worried about, including overvaluation in the commercial real estate market.

The list could go on to support the call from people like Kevin Logan, HSBC’s chief US economist, who thinks the Fed will raise rates again in June 2017.

What many on Wall Street are betting on, however, is that more jobs reports like Friday’s would make the Fed’s December meeting live up to the hype.

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