A 2% inflation target is a myth, says JPMorgan's Bob Michele

Key point: Bob Michele (JPMorgan GFICC CIO) said the 2% inflation target is effectively a 'myth' — inflation has not been at 2% in roughly half a decade (~5 years). Implication: markets are positioned for higher-for-longer inflation and interest rates, which raises risk for bond duration and rate-sensitive assets and argues for monitoring duration exposure and rate-linked positioning.

Analysis

Key point: Bob Michele (JPMorgan GFICC CIO) said the 2% inflation target is effectively a 'myth' — inflation has not been at 2% in roughly half a decade (~5 years). Implication: markets are positioned for higher-for-longer inflation and interest rates, which raises risk for bond duration and rate-sensitive assets and argues for monitoring duration exposure and rate-linked positioning.