Will 2010 be Jinxed for Fed Chairman Bernanke?

At the FOMC meeting on December 15-16, the Fed reiterated its intention of keeping interest rates “at exceptionally low levels for an extended period.” Since the market expected the Fed’s statement, there was limited reaction in the bond, equity and foreign exchange markets. The Fed continued to indicate that it is unlikely to raise interest rate levels till resource utilization remains low, inflation trends are subdued and inflation expectations remain stable.

According to Hajime Kitano of JP Morgan, Japanese stocks had taken a beating after the November Fed meeting in which interest rates were kept unchanged. The analyst believes that Japanese stocks would improve when interest rates rise. However, the 2010 outlook for Japanese stocks is weak if Fed chairman Bernanke, who has been selected as Time Magazine’s “Person of The Year,” continues to have his way. JP Morgan points out that the following year has historically been jinxed for the person who gets this honor.