JPMorgan's Bob Michele Criticizes Fed Leadership Following Rate Cut Decision

This analysis is based on the Bloomberg Television interview [1] published on October 29, 2025, featuring Bob Michele, JPMorgan Asset Management’s global head of fixed income, criticizing Federal Reserve leadership following the latest FOMC decision.

The Federal Reserve’s decision to cut interest rates by a quarter point during the October 29, 2025 FOMC meeting has drawn significant criticism from major financial institutions. Bob Michele, JPMorgan Asset Management’s global head of fixed income, stated that Fed Chair Jerome Powell is “losing his grip” on the Federal Reserve during his appearance on Bloomberg’s “The Fed Decides” coverage [1]. This criticism represents a notable challenge to Fed leadership from one of the most influential voices in fixed income markets.

The rate cut marks the second easing of monetary policy in 2025, despite inflation running at approximately 3% - above the Fed’s 2% target rate [2]. The decision comes amid weakening labor market data, suggesting the Fed is prioritizing employment concerns over inflation control. Market participants had widely anticipated this rate cut, with futures markets pricing in the move and potentially another quarter-point cut expected in December [3].

The criticism from JPMorgan’s Michele reveals growing institutional concern about the Fed’s policy direction and leadership cohesion. Several key insights emerge:

: High-profile criticism from major institutional leaders like Michele could erode market confidence in Fed leadership and policy direction. Given JPMorgan’s dominant position in bond markets, such commentary carries significant weight with market participants [1].

: The Fed faces increasing difficulty balancing its dual mandate. With inflation persistently above target at 3% versus the 2% goal, yet labor markets showing weakness, the central bank appears to be shifting priorities toward employment concerns [2]. This represents a significant policy pivot that may undermine the Fed’s inflation-fighting credibility.

: While markets have already priced in anticipated rate cuts, including another potential quarter-point reduction in December, the underlying economic justification remains questionable [3]. The Fed’s balance sheet runoff is also scheduled to end in December, adding another layer of monetary policy complexity [2].

: Michele’s criticism may reflect broader institutional concerns about Fed independence and decision-making processes. As a major fixed income manager, JPMorgan’s perspective could signal similar views across the institutional investment community.

• Leadership Credibility Risk
  : Continued high-profile criticism of Fed leadership could undermine market confidence in monetary policy effectiveness and central bank independence [1]
• Policy Inconsistency Risk
  : The Fed’s shift toward rate cuts despite elevated inflation may create policy credibility issues and long-term inflation expectations [2]
• Market Volatility Risk
  : Disagreement between major institutional voices and Fed policy could lead to increased Treasury market volatility and yield curve distortions
• Economic Uncertainty Risk
  : The balancing act between inflation control and labor market support creates uncertainty about the Fed’s true policy priorities

• Fixed Income Positioning
  : The current policy environment may create opportunities in duration management and yield curve positioning strategies
• Market Timing
  : Understanding the divergence between Fed policy and institutional views could provide insights for short-term trading opportunities
• Risk Assessment
  : The situation offers valuable information for assessing central bank credibility risks across different asset classes

The Federal Reserve’s latest quarter-point rate cut has drawn significant criticism from Bob Michele, JPMorgan Asset Management’s global head of fixed income, who stated that Fed Chair Jerome Powell is “losing his grip” on the central bank [1]. This represents the second rate cut of 2025, implemented despite inflation running at 3% - above the Fed’s 2% target [2]. The decision comes amid weakening labor market data, suggesting a policy pivot toward employment concerns.

Markets had already priced in the anticipated rate cut, with futures markets indicating potential for another quarter-point reduction in December [3]. The Fed’s balance sheet runoff is also scheduled to conclude in December, adding complexity to the monetary policy landscape [2]. The criticism from such a prominent institutional voice raises questions about Fed leadership cohesion and policy direction, potentially affecting market confidence in central bank decision-making processes.

Investors should monitor for additional institutional commentary, Fed responses to leadership criticism, and market reactions in Treasury yields and Fed funds futures. The evolving situation highlights the challenges the Fed faces in balancing its dual mandate while maintaining credibility with both markets and the public.