JPMorgan Investment Management's Bob Michele said the Federal Reserve sent a "don't worry about it" signal to markets spooked by surging oil prices and heightened geopolitical risk because of the war in Iran.
The economy is feeling "a little bit of a near-term inflation shock" that could actually potentially help accelerate growth, Michele said in a Bloomberg Television interview Wednesday after the central bank left rates on hold. He said he was "gobsmacked" by the Fed's decision.
"They're telling us don't worry about it," said Michele, the bank's global head of fixed income. He isn't buying it, he added: "There is a real impact to inflation and ultimately the labor market."
Former Federal Reserve Vice Chair Richard Clarida suggested the Fed needs a synonym for "transitory" to describe current inflation pressures, noting that oil futures indicate price increases will dissipate over time. "The short answer is, nobody including the Fed knows," Clarida said about the duration of elevated inflation.
Clarida described the Fed's overall stance as "dovish" and "constructive," while acknowledging significant geopolitical risks that could affect the inflation outlook. Deploying artificial intelligence throughout the economy factors into the Fed's thinking, said Clarida, who is now global economic adviser at Pimco.
The question about how long, or even whether, Fed Chair Jerome Powell stays beyond the end of his term in May is still casting a long shadow, Michele said.
"Personally, I think he will stay on past the midterms," Michele said. Powell may not be chair by then, Michele added, but "him staying on i think creates stability."
This story was produced with the assistance of Bloomberg Automation.
(Credit: Shutterstock)
Copyright 2026 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.