For sheer anticipation, it may not be quite the equal of Christmas morning, but most market commentators can hardly wait for Tuesday afternoon to see what the Federal Open Market Committee has brought them. Not me. In this season of intense Federal Reserve focus, I find my attitude becoming more and more one of "humbug."
Not that I don't believe in the FOMC (or Santa, for that matter); I do. I just think way too much is made of its every wink and nod. Will Tuesday's statement delete the characterization of the current policy stance as "accommodative" and therefore obviate the withdrawal of that accommodation on "a path that is likely to be measured?" The minutes of the Nov. 1 meeting set us up for changes to the ritualistic words, and market participants are poised to deconstruct them with an anxiety equivalent to what might be the case if Clement Clark Moore's classic poem were to be roughly re-edited.
It will be fascinating to read whether the FOMC still chooses to inform us that "with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal." That amounts to a content-free commentary; I'll win our state's lottery jackpot, too, if I put down all the right numbers. It is clear that the members feel that risks today are skewed toward growth overflowing the vessel of America's productive capacity and spilling over into inflation. Maybe the first, say, 10 of the past 12 quarter-point tightenings can't be interpreted as evidence-through-action of that perception, but the last two, and certainly any snuggings still to come, declare that bias.
To me, the words that really matter in these post-meeting press releases are "the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability" -- and that should go without saying.
Market Commentary Watch Speculation, but Don't Worry Yet 12/12/2005 10:01 AM EST Fanciful surges in loss-makers Myogen and 8X8 won't signal a threat to the bull until they spread.
Market Commentary The NDX Finds Its Center 12/12/2005 9:32 AM EST If the index moves away from 1690 in either direction, it won't get far before snapping back.
Market Commentary Big Buyers May Take to New Trend in '06 12/12/2005 8:55 AM EST Institutions have good reason to keep buying losers, as with Oppenheimer and Take-Two.
Jim Griffin is economic consultant and portfolio adviser to ING Investment Management and its Hartford-based unit, ING Aeltus, which manages institutional investment accounts and acts as adviser to the ING Mutual Funds. His commentary on the financial markets is based upon information thought to be reliable and is not meant as investment advice. While Griffin cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.
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