Whilst markets expected the Federal Reserve to keep interest rates on hold at their Wednesday meeting, the accompanying statement which followed was more hawkish in tone than many expected. The previous comment about taking into consideration global factors (basically China) was removed suggesting a greater likelihood of a December rise. Bond yields rose further yesterday to price in a 50/50 chance of a rate rise, up from 33% before the meeting. All eyes will now turn to the few economic indicators due before Christmas including two further payroll reports and two more CPI inflation data points. The first revision to Q3 GDP will also be eagerly awaited. We suspect that if the data, which has been weaker of late, is just about in line, it will be enough for the Fed to justify a hike in December. Unusually, shares in New York and London rose on the news possibly reflecting greater confidence that the economy can weather a rise.