Bob Michele’s career is a useful reminder that expertise in markets doesn’t always begin with a finance degree. He studied classics and natural sciences, planned to become a doctor, and entered banking almost by accident. What followed was a long career across major investment firms and, eventually, leadership of global fixed income at J.P. Morgan Asset Management.
The Masters in Business conversation with Michele, the firm’s Chief Investment Officer and Head of Global Fixed Income, Currency and Commodities, is transcribed below. You can stream or download the full episode, including podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. Earlier episodes are available here.
Masters in Business
Bob Michele, Chief Investment Officer and Head of Global Fixed Income, Currency and Commodities, J.P. Morgan Asset Management
Bloomberg Radio | Transcript | October 2026
00:00:02 Bloomberg Audio Studios: podcasts, radio, news.
00:00:07 BARRY RITHOLTZ: Bob Michele has built an extraordinary career and is among the most informed and influential figures in fixed income. At J.P. Morgan Asset Management, he leads global fixed income, currencies and commodities, overseeing substantial assets and teams. The firm serves corporate clients, central banks and individual investors around the world.
Few people have spent as much time thinking about what moves bond markets. I enjoyed this conversation, and I expect you will too. Here’s my interview with J.P. Morgan Asset Management’s Bob Michele.
Bob, welcome to Bloomberg.
00:01:12 BOB MICHELE: I’m delighted to be here.
00:01:13 BARRY RITHOLTZ: I’m glad you could join us. Before we get to what you’ve built at J.P. Morgan and the state of fixed income, let’s start with your path into the business. You studied classical languages at the University of Pennsylvania, an unusual route to bond management. What did you expect to do?
00:01:41 BOB MICHELE: I didn’t have much of a plan. I was a dual major in classics and natural sciences. Both of my parents were doctors: my father was a surgeon, and my mother was an orthodontist. My summer jobs were generally in hospitals or laboratories. At Penn, I was on the pre-med track and expected to go to medical school.
My father died during my junior year, and I thought I should take some time before continuing toward medicine. Wharton was nearby, and I heard plenty about business and banking. I figured I could try banking for a year. People pointed out that I had taken no business courses. I asked them to suggest one, and they said accounting. I took it in the second term of my senior year, understood very little, and applied to a number of banks. Bankers Trust hired me. After a week working in New York banking, I knew I wasn’t going to medical school.
00:02:49 BARRY RITHOLTZ: So it was a lucky break: you joined Bankers Trust straight out of college?
00:02:55 BOB MICHELE: More or less. I wrote to lots of firms. I still laugh about one application: I went to College Hall at Penn, pulled Lehman’s information from a folder and sent a letter. I misspelled Lehman as “Leghman.” I was studying Latin, Greek and science, not business, and didn’t know better. I never heard from them. They probably got a laugh out of it.
00:03:28 BARRY RITHOLTZ: Perhaps they thought you were too risky. You started as an analyst at Bankers Trust, became a portfolio manager, then moved to Brown Brothers Harriman to manage taxable and total-return portfolios. You weren’t an economist or a market strategist; you went from classics into analysis and portfolio management. How did that progression work?
00:03:58 BOB MICHELE: I took the CFA because I wanted to build the background I lacked, and the designation was becoming popular. I also believed I could teach myself. If you can learn organic chemistry by attending classes a few times a week for a term, I reasoned, perhaps you can learn a new field by working at it eight to 12 hours a day, five days a week, for 30 days. You can absorb a lot that way. The mathematical side of investing appealed to me; I’d studied science, and math was already part of how I thought.
00:04:53 BARRY RITHOLTZ: People say investing is neither a science nor an art, but some combination. Does that distinction apply to fixed income?
00:05:04 BOB MICHELE: Fixed income feels more like a science to me. Equities may lean more toward art. I worked extensively with equities until the early 1990s, then moved entirely into fixed income. Bonds appealed because you can model their valuation. They have maturities, and you can calculate the cash-flow dynamics. That sense of a defined endpoint suited my science and math background.
In New York, one of my early roommates worked in corporate finance at Bache. We spent late nights debating how to value a stock. The argument could get theoretical, and after a year we still hadn’t settled on the right method. There were dozens of approaches, each producing a different valuation. I’m pleased with the direction I chose.
00:06:09 BARRY RITHOLTZ: Academics generally regard sustained outperformance in active stock picking as difficult, and beating passive equity investments over the long run is hard. Active bond managers, by comparison, seem to add value relative to broad bond indexes. Is that because fixed income is more quantitative, or because bond managers can choose from a far larger pool of securities than equity managers choosing among roughly 3,500 stocks?
00:07:05 BOB MICHELE: Science plays a meaningful role. Bond investors can calculate yield, and they often gravitate toward higher-yielding securities. That yield can provide a cushion. Over time, a portfolio yielding more than its benchmark is likely to outperform that benchmark. I expect my team to beat its benchmark almost all the time.
There’s another comparison to make, though. Many managers beat their benchmarks, so we also have to measure ourselves against our competitors.
00:07:52 BARRY RITHOLTZ: You later ran U.S. fixed income at First Boston, now known as Credit Suisse; became a managing director at BlackRock; and led fixed income in London at Schroders Investment Management. What did your experience in Britain and the eurozone teach you about bond markets?
00:08:15 BOB MICHELE: It was a terrific experience and shaped how I think globally. I was in London from 2001 to 2010, during the euro’s creation and expansion. When the possibility of moving to London first came up in 2000, people thought I might end up in Frankfurt, where the European Central Bank is based. But thousands of Americans went to London to work in banking, liked living there and stayed. It was an exceptional decade.
00:09:14 BARRY RITHOLTZ: Were all ten years at Schroders, or did you join J.P. Morgan before then?
00:09:19 BOB MICHELE: I moved to J.P. Morgan near the end, in 2008. Seth Bernstein, who had appeared on your program earlier, was then head of fixed income there. The firm was dealing with problems, and in late 2007 or early 2008 he contacted me in London about becoming Chief Investment Officer. I considered the opportunity. J.P. Morgan had a huge platform, and early in my career I’d learned how much fixed-income business it did with central banks. Those were flagship accounts in the early 1990s. I knew we’d be returning to the New York area, and I decided to go.
00:10:18 BARRY RITHOLTZ: That sounds like one of the top jobs in the field.
00:10:28 BOB MICHELE: Schroders was an excellent firm, and I loved my time there. I spent ten years with the company. It treated my family and me well, and we helped build a strong franchise. We were winning business across several areas, not just fixed income. But opportunities come and go. I didn’t think this one would come around again if I passed it up.
00:11:00 BARRY RITHOLTZ: You joined J.P. Morgan in 2008 as the financial crisis was intensifying. What was it like starting at a new firm while credit markets were breaking down?
00:11:15 BOB MICHELE: At Schroders, we had relatively clean portfolios and were performing very well. I was working under a U.S. contract at the time. Only two weeks passed between my resignation from Schroders and my start at J.P. Morgan. Lehman Brothers failed during that gap.
00:11:47 BARRY RITHOLTZ: Lehman with the “g,” right?
00:11:50 BOB MICHELE: With a “g” and an “h.” The whole firm was gone. I arrived at J.P. Morgan and sat down with Seth, who explained the situation. There were problems, but they could be addressed. Some parts of the business were overallocated. It looked possible to make changes, put a disciplined process in place and shape the business from there. It was an exciting moment in the markets.
00:12:30 BARRY RITHOLTZ: J.P. Morgan had faced a subprime derivatives problem years earlier. Jamie Dimon famously told people to get that exposure off the bank’s balance sheet, saying the firm wasn’t in the speculative business and wasn’t a gambling house. I’m paraphrasing. When other major banks ran into trouble, J.P. Morgan was positioned to acquire assets cheaply, including Bear Stearns and Washington Mutual, and emerged from the crisis in strong shape. What did that period teach you about bond investing, risk and leverage?
00:13:25 BOB MICHELE: It made you think like a fiduciary. You had to put yourself in the client’s position and ask what they wanted in a bond portfolio. Did they want investments that offered some yield while returning their capital, even if the realized yield or return fell short of expectations? Or were you putting the whole investment at risk?
The crisis also showed how much bonds differ from one another. You need to do your own research and understand each security: its collateral, who owes the payment, how the cash flows work, and what priority rules and covenants apply. You can’t outsource that work. I think it changed how the market approached fixed income.
00:14:28 BARRY RITHOLTZ: Hopefully for the better. After the break, we’ll continue with Bob Michele, Chief Investment Officer and Head of Global Fixed Income, Currency and Commodities at J.P. Morgan Asset Management, on building those businesses at the firm. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
I’m Barry Ritholtz, and this is Masters in Business on Bloomberg Radio. My guest is Bob Michele, who joined J.P. Morgan Asset Management in 2008 and leads global fixed income. His responsibilities also cover currencies and commodities. How do those markets, which are often treated as separate asset classes, interact?
00:15:24 BOB MICHELE: They share a large macroeconomic driver: the health of the global business environment. A healthy economy can bring stronger growth and inflationary pressure, which may push bond yields higher. That environment can also lift commodity prices as demand increases. For currencies, the question is which countries are performing better than others. Start with the global economy, then assess value in each market.
00:16:06 BARRY RITHOLTZ: I’ve often thought of currencies—especially the U.S. dollar—as moving against commodities: a strong dollar tends to weigh on them, and a weaker one can support them. Lately, though, the dollar has held up while commodities have risen. Is another force at work, or is this part of the cycle?
00:16:31 BOB MICHELE: I used to think of gold as the dollar’s opposite: if you didn’t trust the dollar, you held gold, and vice versa. That relationship generally held for a long time. I now meet with many official institutions around the world, and one question comes up repeatedly: they’re overallocated to U.S. dollar assets and fixed income, so what other reserve currency could they consider? For the first time in my career, I struggle to name one.
In the late 1980s, people considered the yen an alternative to the dollar. Japan’s purchases of Pebble Beach and Rockefeller Center captured the mood.
00:17:32 BARRY RITHOLTZ: People thought the Japanese would take them back to Tokyo.
00:17:35 BOB MICHELE: More or less.
00:17:36 BARRY RITHOLTZ: That was the concern.
00:17:38 BOB MICHELE: Then the yen’s moment passed. When I moved to London, the euro was emerging. People saw it as the currency of a united Europe, one with the scale to rival the United States and become a reserve currency. For a while, that seemed plausible. Then we saw the limits of monetary union without fiscal union.
After the financial crisis, attention turned to China and the renminbi. In 2009, China borrowed and spent, creating aggregate final demand when the global economy needed it. There was plenty of talk about empty highways and ghost cities, though those cities eventually filled up. The renminbi’s moment also passed. Central banks have bought some gold, but gold is difficult to use to deliver on their main objective of price stability. It reflects the results of monetary policy more than it lets central banks change that policy. For now, the dollar remains the only real reserve currency, and nobody is ready to challenge it.
00:19:10 BARRY RITHOLTZ: I’ve always wondered why economic growth should depend on how much gold we dig out of the ground. Setting that aside, you didn’t mention Bitcoin or other cryptocurrencies. Are people imagining that a central bank digital currency or a cryptocurrency such as Bitcoin could replace the dollar?
00:19:38 BOB MICHELE: Bitcoin is controversial, in part because people disagree over what it represents. There’s also concern that an untracked, unregulated asset could support criminal activity. That concern is real.
Value beyond cash flow
Bitcoin’s appeal as a store of value rests partly on what people are willing to believe an asset represents. Bob Michele compares that with fine art: a Jackson Pollock painting sold at Christie’s for close to $200 million, though its squiggled lines might look reproducible. A Monet, he argues, could be copied with AI and 3D printing down to its colors and brushstrokes, yet the original could still be worth around $100 million. Replicability doesn’t settle the question of value. Buyers may prize the original precisely because of what it represents.
Michele sees crypto as an alternate asset class and a possible store of value, while declining to tell clients where to put their money. Whether it can become a mainstream alternative to the dollar is less clear. He distinguishes crypto from stablecoins and from a digital currency backed by the U.S. Treasury and supported by the Federal Reserve. That kind of digital dollar, he says, seems close to inevitable; the path for Bitcoin and other crypto assets is harder to call.
Barry Ritholtz suggests the dollar works better as a medium of exchange than as a long-term store of value, given that inflation gradually erodes its purchasing power. Michele agrees: idle cash loses value, while investment can help preserve purchasing power and support future goals such as buying a home. That’s the practical distinction. Money moves through the economy; investors seek returns to keep it from shrinking in real terms.
Rates and a return to normal
Michele says today’s fixed income environment resembles the 2000s, but cautions against reading that as a prediction of another global financial crisis. He sees a healthier backdrop: businesses have productive uses for capital, demand is competing for it, and borrowing will carry a meaningful cost again.
He points to the Federal Reserve’s first Summary of Economic Projections in 2012. Its estimate for the long-run neutral federal funds rate was 4.25%, based on a historical real rate of 2.25% plus a 2% inflation target. Michele thinks the economy is moving back toward that kind of rate environment. He also argues that the housing market’s oversupply helped turn an asset once thought unlikely to fall into the trigger for the Great Financial Crisis.
The long-run comparisons Barry cites are striking: from 2001 to 2026, the 10-year Treasury averaged just under 3.25%, and the 30-year fixed mortgage rate averaged a little above 5%. In the preceding 25 years, the 10-year averaged more than 8%, while mortgage rates from 1976 to 2000 averaged about 10%. Michele thinks current conditions reflect, in large part, a move away from an unusually low-rate period. He remembers taking out a first mortgage at 10⅝% and refinancing at 10¼%—a reminder of how expectations shift across rate regimes.
He doesn’t think the historical midpoint alone defines normal. The early part of the older period followed Paul Volcker’s rate increases, which took fed funds to 20%. Having experienced both 20% and 0% rates, Michele puts a more plausible range for the Fed at 3% to 6%, with 4.5% as a useful working estimate for neutral. He considers that healthy, especially for bond investors: investment-grade portfolios can now offer yields above 6%, and portfolios with some below-investment-grade exposure can approach 7%, compared with yields around 2% in the earlier period.
A more inflation-conscious Fed
Michele expects Chair Kevin Warsh to shape the Federal Reserve around his own priorities, as leaders before him have done. He says markets will adapt, as they did during the transitions from Volcker to Greenspan and from Jerome Powell to Warsh.
He’s less persuaded by a retreat from the Fed’s recent transparency. Central banks have published models, minutes and research that let investors see which economic questions policymakers are weighing. That information also gives businesses and market participants a chance to offer feedback. In Michele’s view, the process mobilized millions of people across the industry, and AI could make it easier to process that input. He hopes the Fed finds a middle ground that preserves some of that communication.
His expectation is that policymakers will put more weight on inflation than on growth. The Fed’s growth focus made sense after the financial crisis, he says, but a large new generation is now entering its prime earning, spending and saving years. People born in 1991 have become the largest birth cohort, replacing those born in 1959. Their economic activity could support growth while also adding inflation pressure. Michele thinks central banks are beginning to adjust to that possibility.
Less guidance does leave investors with fewer clues. The Fed had projected rate cuts earlier in the year that never arrived, Michele acknowledges, but its public discussion still showed which issues mattered. Large investment firms will continue to build their own models, talk to companies and households, and publish views on risks and value. Then they’ll watch how the Fed responds.
On inflation, tariffs and the war in Iran, Michele doesn’t think the Fed simply waved away the risks. He says policymakers learned from 2022 not to assume every price shock is transitory. They may wait to see whether a disruption fades, then respond if higher oil prices feed into broader inflation measures. The Fed has begun a hiking cycle, he says, and will raise rates further if the evidence demands it. How much that cycle reflects longer-lasting pressure remains uncertain.
AI’s financing demand
For Michele, the AI buildout is already changing how JPMorgan Chase operates, and it’s creating a large financing opportunity. He says Jamie Dimon and Mary Erdoes pushed the firm to take the technology seriously more than three years ago, comparing its potential with the Industrial Revolution. The bank has since used AI across its business, including fixed income. In a recent internal “Shark Tank,” analysts and associates submitted 11 proposals; three became finalists, and the firm chose to fund two. Michele says many clients are only beginning their own adoption.
He sees the investment case from both sides: firms want AI capacity, and the hyperscalers need capital to build it. Demand is high, while the ability to supply capacity is limited. Companies can borrow against strong balance sheets to build faster, or fund expansion from cash flow. Michele argues that waiting carries its own risk: a company that prioritizes harvesting current profits could lose ground to faster competitors, as BlackBerry and Nokia did in earlier technology shifts.
There’s no settled view of what AI will look like five or 10 years from now. Michele compares the uncertainty with the early internet era: imagining today’s smartphone in 2000 would have changed how people judged the dot-com boom, even though the iPhone arrived seven years later. The present case is more concrete. He says AI is already changing JPMorgan Chase’s operations, and he’s willing to finance borrowers building out the infrastructure.
Ritholtz describes how the bank’s fraud alerts have become more targeted: familiar hotel and overseas travel purchases no longer trigger the same warnings, while a $25 charge at a Walmart in Nebraska was flagged. Michele says the financing need extends across the hyperscalers and across JPMorgan Chase’s businesses. The bank can offer credit lines, direct loans, public bond issuance in dollars or foreign currencies, and equity financing. He describes his own role as one small part of a broader relationship with those companies.
Private credit joins the mix
Michele welcomes the growth of private credit as a legitimate non-bank lending channel. He acknowledges that a bank might prefer to hold loans on its balance sheet, but says lending markets evolve. He compares private credit’s development with the mortgage market: in the 1980s, borrowers typically got mortgages from banks, which then sold them to Fannie Mae, Freddie Mac or Ginnie Mae to replenish capital for further lending. Today, Rocket Mortgage is the largest mortgage lender, and banks and non-bank lenders coexist. For Michele, that history suggests private credit can become a lasting part of the financing system.
Borrowers have more choices, and investors want more compensation
Public and private credit are starting to operate as parts of the same market. Larger borrowers are weighing whether to issue bonds or take direct loans, and Bob Michele says his asset management group has partnered with the commercial bank to assess loans it originates. The bank brings the borrowers; the investment team makes an independent fiduciary assessment and may place suitable loans in client portfolios. That convergence could give borrowers another financing route while broadening investors’ access to credit. Michele sees it as healthy for bond markets.
Deficits matter, but debt service is the sharper test
Asked whether government deficits are driving bond yields higher, Michele called them one influence among several. His frustration is plain: households weigh costs and borrowing before spending, while governments appear less restrained. He points to rising deficits in the United States, France and Germany, as well as longstanding high debt in Japan and China.
The headline debt ratios are striking, but they don’t tell the whole story. Michele put Japan’s debt near 300% of GDP, China’s near 200%, and the US just above 100%. He said he doesn’t know where the sustainable limit lies, but doesn’t think the US is there. He prefers to watch debt service relative to GDP: a level near 5% would be historically high for the US, while the current figure is in the mid-3% range. Years of low coupon government borrowing have helped keep the burden manageable.
Barry Ritholtz added that debt service at 10% of GDP is where countries can run into serious trouble. Michele agreed, then questioned how much additional US borrowing it would take to reach that point. The exchange is a useful reminder that debt totals alone don’t establish an imminent crisis; the cost of servicing them matters, too.
US Treasuries face competition from abroad
Michele rejects a simple “Sell America” reading of foreign demand for Treasuries. His point is more measured: the US has some of the world’s strongest bond markets, but it isn’t the only attractive borrower. Repricing has pushed yields higher in several countries, including Australia and Japan. Michele favors central banks willing to accept some near term pain to contain inflation, rather than accommodate higher energy costs until they feed through the economy.
He is particularly positive on local currency emerging market debt. Michele says many of these markets now have full yield curves, domestic pension funds and insurers supporting longer dated bonds, and wealth platforms buying shorter and intermediate maturities. In his view, local investors own close to 90% of local emerging market debt, leaving less dependence on cross border flows. He also points to central banks that began raising rates in 2021, ahead of their developed market peers. That record supports his confidence, though it doesn’t make every country’s debt equally attractive.
The portfolios he described include Mexico, Colombia and Brazil, along with the Czech Republic and Poland. Michele also said his team bought a new South African issue yielding close to 10%. Across the basket, he cited nominal yields near 9% and real yields near 5%. Those are substantial returns, but the case rests on both price and confidence in each country’s monetary authorities. Michele said he also heard Paraguay’s president speak at a conference and began considering whether that country’s hard currency debt might make sense. His approach is to assess what debt is available and what it costs, rather than label a market good or bad in the abstract.
TIPS point to policy uncertainty
US inflation indexed bonds, or TIPS, offer a read on what the market has priced in. Michele said their implied inflation expectation was 2.35%, suggesting that concerns about oil and possible follow on effects hadn’t unsettled expectations. The more striking move was in real yields: at 2.9%, they were, he said, at levels last seen around the dot com era.
For Michele, that points to uncertainty about policy rather than a loss of faith in central banks’ ability to control inflation. Investors are trying to price monetary policy whose response rules are harder to anticipate, continued government borrowing, geopolitical risks involving the Middle East and Russia’s war in Ukraine, and political uncertainty around elections in France and the US midterms. His reading: bond investors want more compensation for those risks, and higher real yields are where that demand is showing up.
Ritholtz then turned to municipal bonds, citing a New York resident’s combined national and New York muni portfolio yielding close to 5% as October approached. He said that equated to a taxable yield above 8%, especially striking compared with rates five years earlier, and asked Michele for his view on munis in high tax states including New York, California, Connecticut, New Jersey and Massachusetts.