JPMorgan strategist claims Fed has surrendered on 2% inflation

JPMorgan’s top fixed-income executive has a blunt message for anyone still waiting for the Federal Reserve to wrestle inflation back to its official target: stop waiting. Bob Michele, the bank’s Chief Investment Officer for Global Fixed Income, Currency, and Commodities, told Bloomberg Television that the Fed’s 2% inflation target has become a “myth” in the eyes of financial markets. The US hasn’t actually hit 2% in more than five years. The new number is 2.5% “We haven’t been there in half a decade,” Michele said during an April 9 appearance. “Two and a half feels like the new 2%.” Michele backed it up with JPMorgan’s own forecasts, projecting headline and core inflation will land between 3% and 3.5% for 2026, with real GDP growth running at roughly 2.25%. Michele isn’t a lone voice inside JPMorgan’s research apparatus. David Kelly and Jacob Manoukian, both senior strategists at the bank, have made similar arguments throughout 2026. They’ve coined the term “Teflon inflation” to describe the current environment, one where prices stay elevated but refuse to trigger the kind of wage-price spiral that would force the Fed into aggressive action. The Fed says otherwise Fed Chair Kevin W...