SINGAPORE - The Federal Reserve pivoted towards a December interest-rate increase, betting that further job gains in the United States will lead to higher inflation over time and allow them to close an unprecedented era of near-zero borrowing costs.

In a statement on Wednesday (Oct 28), policy makers at the US central bank (the FOMC or Federal Open Market Committee) expressed more faith in the strength of the economy than expected, dropping its warning from September of global risks and referred to its "next meeting" on Dec 15-16 as it discussed the timing of the first rate rise since 2006.

Here's what 3 analysts have to say:

1. UOB economist Alvin Liew: The Fed surprised

"The Fed surprised markets with specific reference to 'whether it will be appropriate to raise the target range at its next meeting'... cementing our expectation for the first Fed rate hike to take place in the Dec 15-16 FOMC meeting.

"The other surprise in the October FOMC was the removal of the direct reference to global developments restraining US growth and depressing inflation. We still forecast the US Fed funds target rate (FFTR) to reach 0.5 per cent by end 2015, and 1.5 per cent by end 2016. The concerns about the US government debt ceiling and another US government shutdown have abated, and the immediate focus now is the preliminary US third quarter GDP today and the October US labour report on Nov 6."

2. Citi Research analyst William Lee: Market uncertainty heightened, Fed credibility weakened

"When the FOMC dismissed so casually in October the principal reason it cited the month before for delaying lift-off, this belies the importance of other economic rationale underlying the Fed's policy stance. Markets will find it difficult to infer accurately the policy consequences of the FOMC's continuing belief that the moderate expansion remains on track.

"The fluidity with which the Yellen FOMC adopts and discards reasons for changing its monetary policy stance has heightened market uncertainty, and diminished the Fed's credibility."

"For now, we maintain our view that March will be the most likely meeting for initiating interest rate normalisation, until we see more evidence that the FOMC would act sooner based on their established criteria - not rhetoric or saving face."

3. Thomas Lam, chief economist at RHB Securities Singapore: Fed refocused debate on domestic considerations

"The FOMC dropped the September reference on global considerations, which alluded to 'recent global economic and financial developments may restrain economic activity somewhat… likely to put further downward pressure on inflation…'. Arguably, the shift in the guidance was probably intended to dissuade one-sided bets on the December meeting, and the reduced emphasis on global developments might be one way to simplify the list of considerations in the lift-off equation, refocusing the debate mainly on domestic considerations."