Federal Reserve policy makers said they will consider tightening policy at their next meeting in December, without making a commitment to act this year, as the economy continues to expand at a “moderate” pace.

Even with a slower pace of recent job gains, “labor market indicators, on balance, show that underutilization of labor resources has diminished since early this year,” the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington.

The Fed removed a line from September’s statement saying that global economic and financial developments “may restrain economic activity somewhat,” saying Wednesday only that the central bank is monitoring the international situation. The committee also added a reference to the possibility of increasing the rate “at its next meeting” based on “realized and expected” progress in reaching goals.

“The Fed is clearly signaling that the default plan is to raise rates in December,” said Dean Maki, chief economist at Point72 Asset Management in Stamford, Connecticut. “It signals that something needs to prevent them from hiking in December rather than that something needs to happen for them to raise.”

David Fuller's view

Economic news has improved somewhat in October and the stock market - a sometimes lead indicator - has done best of all.  Action by the Nasdaq 100 and S&P 500 Indices has led the recovery.  This certainly does not look like bear market action to me. However, it does confirm that we have completed “Wall Street’s first ten percent plus correction” which this service said would occur before the end of October.

(See also: No! The Dow Death Cross (Oh, Never Mind), or listen to any of the August Audios before I went on holiday)