With a 4% probability, it is no surprise that The Fed did not raise rates. Since The FOMC "folded" in September blaming global turmoil, stocks, bonds, and precious metals have soared as China (and EM) chaos has calmed while domestic data has declined. This has led to 'lift-off' expectations extending to April 2016, and so the question today is - how will The Fed convince the world it 'will' raise rates when it really can't... *FED REMOVES LINE THAT GLOBAL DEVELOPMENTS MAY RESTRAIN GROWTH *FED SAYS U.S. ECONOMY `HAS BEEN EXPANDING AT A MODERATE PACE' A definite hawkish bias but so we are left data-dependent (fundamentals bad, stocks good), and less economically optimistic, but are supposed to believe that December (34%) is still a live meeting (because of some hockey-stick expectation in data) because The Fed needs to raise to show that it can. Pre-FOMC: S&P Futs 2078, 10Y 2.07%, EUR 1.1060, Gold $1176, WTI $46.01 * * * Further headlines: *FED SAYS LABOR MARKET SLACK HAS DIMINISHED SINCE EARLY THIS YR *FED SAYS RISKS NEARLY BALANCED, MONITORING GLOBAL DEVELOPMENTS *FED SEES SOLID GAINS IN HOUSEHOLD SPENDING, BUSINESS INVESTMENT *FED: SURVEY-BASED MEASURES OF INFLATION OUTLOOK REMAINED STABLE *FED REPEATS IT SEES INFLATION RISING TOWARD 2% IN MEDIUM TERM *FED: PACE OF JOB GAINS `SLOWED,' UNEMPLOYMENT `HELD STEADY' *FED REPEATS HOUSING IMPROVED FURTHER, EXPORTS BEEN `SOFT' * * * Here are the key changes in the statement (full redline below). The Fed has removed this section entirely: The labor market continued to improve. And removed the "global economic developments" part as well: Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term It added "at solid rates in recent months" here: Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further It also added that the Fed is monitoring both economic and financial developments, but no longer abroad: The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring global economic and financial developments abroad And made the December decision "rate hike" quite explicit: In determining how long whether it will be appropriate to maintain this raise the target range at its next meeting * * * Since the September FOMC "fold", precious metals have outperformed (Silver +9%) with Stocks and bonds close behind (up 4-5%) and HY bonds weak... And Rate-hike odds have collapsed (Dec 32% only) as the expectations for liftoff are now back out to March/April 2016... Despite Global turmoil's apparent disappearance... * * * Full Redline Below... Finally, the word count moderated once again, and after rising to 588 in September, the highest since 2014, it declined again to 578 words.