This article has been updated following the release of the Federal Reserve's latest policy statement.

NEW YORK (TheStreet) -- The most important clue about when the Federal Reserve will raise interest rates wasn't in Wednesday's policy statement but is likely to come from Thursday morning's release of a key economic indicator.

That's when 's the Commerce Department reports on how much the economy grew in the second quarter, which will tell the central bank if the economy is ready for interest rates to start rising.

Forecasts for the nation's gross domestic product, released Thursday at 8:30 a.m. EDT, are running at about 2.9%, according to a survey by Econoday, and 2.7%, according to The Wall Street Journal, but with a broad range of estimates ranging from 1.9% to 3.5%.

At the low end, that would be a powerful argument that the economy hasn't had the second-quarter liftoff Federal Reserve Chair Janet Yellen and others have said appears to be happening. And at the high end -- say, at 3% or above -- it would be a clear sign the economy is growing above trend, and likely to keep spitting out enough jobs to push the 5.3% unemployment rate to 5% or below by year-end.

Investors found little to go on when the Fed released its latest policy statement at 2 p.m. Wednesday after a two-day meeting. Although stocks remained near their highs for the day, the markets may have to wait until Thursday morning to get a clearer picture.

So, will a GDP report above 3% prod the Fed to begin raising rates in September rather than December? We posed the question to a half-dozen economists. Most said GDP per se won't be decisive -- but some conceded that a GDP pickup will mean a jobs pickup, which is what the Fed is really looking for. Here's what the economists had to say.

Diane Swonk, chief economist, Mesirow Financial

The pace of growth doesn't matter as long as the labor market is still edging toward full employment and the Fed is confident inflation will make it back to 2%. Neither inflation nor employment have to be at the Fed's goal to lift rates. The first move is still considered pre-emptive, almost symbolic, although disruptive. The Fed really wants the pace of rate hikes to be gradual, and it is easier to ensure that by starting in September or December than now.

Factors that could sideline the Fed in September are more market oriented. If markets are in a tail spin because of something going in China, for instance, it will be difficult for the Fed to add insult to injury.

Ryan Sweet, U.S. economist, Moody's Analytics

If GDP growth exceeds the economy's speed limit, it would be a clear sign that slack continues to diminish. By our calculations, potential GDP growth is south of 2% currently. This is a fairly low bar to overcome. Second-quarter GDP is backward looking and as long as it shows the economy bounced back after a slow start to the year, the Fed will turn its attention to the July employment report.

The July employment report takes on added importance, as it is one of only two to come before the September meeting. Odds are that the underlying trend in the job market won't shift appreciably between now and September, but the Fed will be looking for further evidence of improvement and confirmation that the problems abroad are not having any spillover effect on the U.S. economy.

GDP growth of 3% would strengthen the case for a September rate hike. Also, the Fed is itching to get this process started. The sooner they start the more gradual they can be in tightening monetary policy.


Tim Duy, University of Oregon professor and author of the Fedwatch blog

I think that 2.5% is enough for them to justify a hike in September. Don't know what it "should" be, to be honest. I think at 2.5%, given their low estimates of potential [non-inflationary] growth, it is sufficient to comport to their belief that inflation will return to trend.

Joel Naroff, president, Naroff Economic Advisers

They are looking at the labor market and compensation, especially as it relates to future spending and inflation. I think only weak GDP, 2% or less, could give them pause, and then only if it wasn't because of inventories.... Anything over 2.5%, with a likely revision of first-quarter GDP to positive (I am guessing about +0.5%) would be enough to keep a hike in play for September.

Note: Naroff has been bullish on the economy and has been predicting earlier rate hikes rather than later. His comments mark off one end of the spectrum of economists' views.

Lindsey Piegza, chief economist, Stifel Fixed Income

We're looking for a disappointment -- sub 2%. the GDP figure will not be the only thing the Fed is looking at. They will look at the underlying trend of the different components of the economy which all appears or mostly appear to be losing momentum.... [We see a] pull back in consumer spending, negative business investment, still-sluggish inflation, international turmoil, increased equity volatility, a multi-decade decline in homeownership. That will keep the Fed on hold.

Note: Piegza has been bearish and thinks the Fed will wait until 2016 to hike rates. She's the bookend to Naroff here.

The GDP report will likely presage an earlier rate hike if it comes in above 3%, or maybe a touch lower. That's not because GDP is so important to the Fed's thinking -- but it does correlate strongly with employment growth, which is the Fed's key variable. Hiring slowed in March and April as the weak first-quarter GDP report was brewing, before rebounding in May. (June's report showed a hiring slowdown that seemed out of step with other data, and may be revised).

A strong GDP report now will be a Reese's Pieces trail that leads to strong jobs reports for July and August -- and a higher likelihood the first hike in the Fed funds rate will be in September. If it's weak, that's a sign that some of the data reports Piegza is citing are not the outliers other economists think they are. A wishy-washy report, around 2.5% growth, would suggest a slog in which inflation stays well below the Fed's 2% target and part-time workers don't quickly land full-time work. In that case, look for the Fed to keep watchfully waiting until December, at least, before making its big move.

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