COMMENT ON THE DECEMBER 16, 2009 FOMC STATEMENT
I continue to believe that a focus on when the FOMC will raise the Fed Funds Rate is incorrect. Rather, the focus should be on when the removal of quantitative easing will begin. When will the FOMC reduce the size of its balance sheet, actually selling some of its direct purchases over the past year?
If there is a FOMC meeting for the market to fear, I suggest March 16, 2010. At that meeting, the committee will have three consecutive unemployment reports to measure any continued improvement from the December 4th Unemployment report. The next FOMC meeting, scheduled for January 27, 2010, does not provide enough time to successfully measure any labor improvement.
Past performance is not a guarantee of future results.
Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.