Bond market is an inviting place to invest, says J.P. Morgan Asset Management Bob Michele

Summary

Bob Michele, CIO at J.P. Morgan Asset Management, discusses the Fed's hawkish pivot under new Chair Kevin Warsh, the likely rate hike, and the rollback of forward guidance. He argues the bond market has already priced in these developments and now looks attractive for investors.

• Fed's hawkish tilt surprised markets, with 9 officials now expecting a rate hike this year.
• Chair Warsh aims to reduce forward guidance, potentially increasing market volatility.
• The 10-year Treasury yield sits around 4.5%, in the middle of a 4.20-4.30% to 4.625% trading range.
• Bond market had already priced in one rate hike before the FOMC meeting.
• Michele believes the bond market is now inviting after repricing hawkishness.
• Inflation may not improve until summer, possibly peaking in May.