Fed may be forced into emergency rate cut before May meeting, JPMorgan executive suggests

Bob Michele, Global Head of Fixed Income at JPMorgan, suggests the Fed may need an emergency rate cut before May due to significant market stress after Trump’s tariffs, which have led to over $5 trillion in losses.

Michele criticizes the Fed for waiting for clear economic stress signals before acting, emphasizing the urgency of the situation and reflecting historical precedents where rapid Fed action was required during crises.

Market participants are pricing in a higher likelihood of rate cuts in June, with 98% probability, while a May rate cut is estimated at only 34%. There’s anticipation that political pressure from Trump will push for quicker Fed action.