What affects markets more, stuff people already know or stuff people don't know yet?

Seems like the answer to that is pretty easy -- the latter. But it's a question worth asking going into a week in which every smart economist on Wall Street, and most of the dumb ones, thinks the

Federal Open Market Committee

is going to raise rates by a quarter-point. Sure, there have been rumors that the Fed would tighten by a half-point.

Alan Greenspan

told some guy from France that that's what he planned to do. With Y2K and elections looming, the FOMC wants to get all its hiking out of the way at once. Etc.

"So much garbage has been written about the Fed, you could choke," said Don Fine, chief market analyst at

Chase Asset Management

. "Nothing is 100% in this world, but the Fed tightening by 25 basis points at this meeting is pretty close to it."

Predictably, since a quarter-point move is seen as such a sure thing, focus has shifted to whether the FOMC will keep a bias toward tightening -- an indication that committee members think the next move, when it's made, will be to higher rates -- or go neutral.

It's a new thing for the FOMC to announce changes in bias at the end of its meetings -- last meeting's move toward tightening was the instance -- so people are somewhat unclear on whether Al & Pals will release a statement when they finish up on Wednesday. The general feeling is that they won't make a statement, and that that will indicate the Fed has maintained its tightening bias.

When the Fed is widely expected to do something, it usually does. Let's say that's the way it goes this time around. When the Fed does what everybody expects it to, there's usually a bit of relief in the market. Just because everybody

expected

it to act in a certain way doesn't mean they weren't

worried

it wouldn't.

But let's get back to the original question.

The thing that people know is that the

Fed

is going to raise by a quarter of a percentage point on Wednesday, and that it will probably keep that tightening bias. The thing that people don't know is what the Fed is going to do next. As it turns out, coming on the heels of the meeting are two economic reports that will help determine just that.

If the data are strong, and yield on the long bond stays up above 6%, all those people who were talking about how a summer rally was going to start as soon as the FOMC meeting was over are going to be sorely disappointed.

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Yep, there's a good chance that the

National Association of Purchasing Management's

June

Purchasing Managers Index

, coming out Thursday morning, and the May

employment report

, released Friday, will be a heck of a lot more important for the market. In fact, nervousness ahead of those two reports may severely limit the chances of a rally off an as-expected FOMC meeting.

If there is a focus, it will be on what the jobs report says about growth.

Salomon Smith Barney

economist Mitchell Held has said that Greenspan was so clear when he spoke before the

Joint Economic Committee

that his

testimony could have been called

Monetary Policy for Dummies

. In a key part of that testimony, Greenspan said:

Overall economic growth during the past three years has averaged 4% annually, of which roughly 2 percentage points reflected increased productivity and about 1 point the growth in our working-age population. The remainder was drawn from the ever decreasing pool of available job seekers without work.

That suggested a few of things. It suggested that the Fed has set a sustainable growth rate of 3%, a percentage point below where it is now. It suggested that growth is again an issue for the Fed, and that it will work to bring it down to what it sees as a sustainable rate. And it suggested that any further reduction of that "ever decreasing pool" of people out of work would make the Fed worry.

"Our feeling is the data will be on the strong side," said Held. "I'm not sure if the market's going to take it well."

If the data are strong, and yield on the long bond stays above 6%, all those people who were talking about how a summer rally was going to start as soon as the FOMC meeting was over are going to be sorely disappointed.

"The 6% threshold proved to be an important psychological barrier," said Byron Wien, chief U.S. strategist at

Morgan Stanley Dean Witter

, "and as long as it stays above 6%, this correction will continue."