While the Fed kept interest rates at zero as expected, they did send two notable signals for investors to think about.

First, they removed the language that first appeared in the last statement, which said that ‘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.’

While they said that they will be monitoring global economic and financial developments, the removal of the language is a signal that they believe the risks are lower, which makes sense given that stocks have rebounded globally, credit spreads have narrowed, the People’s Bank of China (PBoC) cut interest rates and the European Central Bank (ECB) has signaled more quantitative easing.

Second, the Fed seems satisfied enough with the US economy by saying that consumer spending and business investment are ‘solid,’ an upgrade from the last meeting.

Furthermore, they don’t seem too concerned with the recent soft jobs report, saying that ‘labor market indicators, on balance, show that underutilization of labor resources has diminished since early this year.’

The third message, and possibly the biggest in my mind, is that they specifically reference the December meeting when discussing the timing of a possible hike.  It feels like we’ve been playing the ‘will they or won’t they’ game forever, but this is the first time where they talk about the appropriateness of raising ‘at its next meeting.’

You may recall that the blue chip economists thought that the Fed was going to hike in September even though markets weren’t buying it.  When the Fed didn’t raise rates, the blue chip economists seemed to punt along with markets into next year.

I think the Fed sent a wakeup call to markets to say that December really is on the table and I think markets heard the call: the futures markets suggested that the odds of a hike in December jumped from 37 to 50 percent over the course of the day.

There’s still uncertainty about the timing, which seems reasonable since there are two more labor market reports to get through, but at least at this point, December is on the table.