Fed pries door open for December hike

The pretty clear-cut change in the forward-looking portion of the statement suggest that the 2015 hikes are not off the table as far as the Fed is concerned. While this decision will continue to be development-dependent, this apparent change alongside the relatively upbeat economic assessment appears to position the Fed for a possible hike should the data prove supportive.  

The statement echoes the sentiment among the FOMC, which despite two highly-publicized discords from within the Board of Governors, still points to a 2015 liftoff. In fact, eight of the twelve Federal Reserve Bank presidents voted to raise the Fed discount rate which took place just ahead of the September FOMC decision, itself a close call according to some participants.

"The odds of the December rate hike are slightly less than even at this point, but the scales could tip should economic activity hold up better than expected. At this point, it is quite clear the economy has decelerated sharply during Q3, with tomorrow's GDP print likely coming in around 1.5% annualized", says TD Economics. 

Still, much of the slowdown is related to transitory factors. Should domestic strength persist and outweigh the internationally-related weakness, the Fed may yet deliver its long anticipated hike before year end.