Fed rate hike: If not now, when? A December lift-off is expected.

The FOMC claims that its outlook for the US economy is "not fundamentally altered" and the risks are still "nearly balanced." And yet, the Committee appears to be more concerned about the downside risks - notably the slowdown in China and potential spillover effects thereof - because it decided not to raise rates today. The median dot - or as Chair Yellen put it, "the great majority of participants" - still shows one hike for this year. But there are now four officials expecting no hike, with one even calling for negative rates. 

"We maintain our central scenario for one move this year. When? Given today's messaging, December appears more likely than October", says Societe Generale.

According to Chair Yellen, the Committee is concerned that global economic and financial developments could create "unbalanced risks that we want to wait to resolve to some extent." It is unlikely that this will be resolved over the next six weeks. Moreover, it is suspected that one member of "FOMC core" is now in the no-hike camp. It probably will take a good string of positive data to bring that individual around. Another potential issue facing the Fed in October is the small, but not-negligible risk of a government shutdown and another debt ceiling showdown.