The Federal Reserve's Federal Open Market Committee met this week, and, as expected, did not raise interest rates. But the Fed did remove references to overseas "market turbulence" and spoke about the possibility of raising rates at its next meeting in December. The FOMC's Statement says, "Information received since the Federal Open Market Committee met in September suggests that economic activity has been expanding at a moderate pace.... To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress -- both realized and expected -- toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.... Voting against the action was Jeffrey M. Lacker, who preferred to raise the target range for the federal funds rate by 25 basis points at this meeting." The Wall Street Journal interpreted the FOMC's statement as an indication that a hike may be coming in December in the story, "Fed Signals Interest-Rate Increase 'at Its Next Meeting' After Standing Pat." They write, "The explicit reference to the next meeting effectively meant the Fed's decisions about rates are now being made on a meeting-to-meeting basis, though Fed officials stopped short of committing to an immediate move. Officials struck from the statement a sentence introduced in September that pointed to market turbulence and global developments as potential restraints on U.S. economic activity. That reduces an impediment officials had stressed in September as standing in their way."

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