A 2% inflation target is a myth, says JPMorgan's Bob Michele

• The 2% inflation target is considered a 'myth' by markets, with 2.5% seen as the 'new 2%'.
• Current inflation (headline and core) is projected at 3-3.5% for this year, with real GDP at 2.25%.
• The US economy is believed to be able to absorb inflation around 3%, and the Fed is expected to 'sit on their hands' rather than act.

Bob Michele of JPMorgan argues that the 2% inflation target is a myth, with 2.5% being a more realistic and comfortable level for the US economy. He anticipates inflation to hover around 3-3.5% this year, which the economy can absorb, and expects the Fed to remain on hold, 'sitting on their hands,' as they are now more balanced on labor market concerns.