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Key Takeaways The Fed faces pressure to consider an emergency rate cut amid market turmoil. JPMorgan’s Bob Michele raised the flags that companies are under strain. The Federal Reserve may need to implement an emergency rate cut before its scheduled May meeting due to severe market stress, said Bob Michele, Global Head of Fixed Income at JPMorgan Asset Management, in a recent interview with Bloomberg Surveillance. The US stock market is entering its third trading session after losing over $5 trillion just two days after President Trump unveiled an aggressive tariff policy. Michele said the market chaos last week was exceptionally severe, comparable to historical crises—the 1987 stock market crash, the 2008 financial crisis, and the 2020 COVID-19 market downturn. In previous crises, the Fed acted quickly with a decision to cut rates. Michele suggested current market conditions may require similar intervention, meaning the Fed may not be able to wait until May to cut rates. “I don’t know if they can even make it to the May meeting before they start bringing rates down.” Ever since Trump kicked off his second term and threatened tariffs on imports from US key partners like Canada, Mexico, and China, Fed Chair Jerome Powell has repeatedly stated that the central bank is not in a hurry to adjust its policy. In a statement last Friday, Powell reiterated the Fed’s cautious stance toward rate adjustments. He stressed that Trump’s new tariffs are likely to cause higher inflation and slower economic growth in the US. The Fed is committed to anchoring inflation at a rate of 2%. Commenting on the Fed’s current stance of waiting for clear signs of economic stress before acting, Michele expressed doubt that the central bank could wait until its upcoming meeting, scheduled for May 7, to begin lowering rates. “They…

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Filed under: News - @ April 7, 2025 5:25 pm