JPMorgan's Lebovitz: Yellen's message to markets? 'Relax'

Fed Chair Janet Yellen essentially just told investors around the globe to take a breather, David Lebovitz, global market strategist at JPMorgan Asset Management, said Wednesday.

"Coming into 2016, investors were worried that the Fed was going to hike four times this year. We were never really of the view that there were going to be four hikes, and really what Yellen said was 'Look, relax. We're going to go slow,'" Lebovitz told CNBC's "Squawk on the Street."

Global equity markets surged Wednesday after Yellen said Tuesday that recent economic readings have been mixed and that it would be appropriate to proceed with caution in adjusting monetary policy.

European equities closed 1.3 percent higher, while China's Shanghai composite advanced 2.8 percent overnight. U.S. stocks followed suit, with the Dow Jones industrial average briefly gaining more than 150 points, while the benchmark S&P 500 hit its highest level of 2016.

Investors also began to price in fewer rate hikes from the U.S. central bank after Yellen's speech. According to the CME Group's FedWatch tool, the first better than 50 percent chance for a rate rise this year is in November, while the chances for an April hike are 5 percent.

"I think what's more important about Yellen's comments yesterday is she acknowledged the global risks, she acknowledged the fact that yes, inflation here in the U.S. has looked strong ... but there could be some downside later this year, and all that warrants a very cautious approach," Lebovitz also said.

Last month, inflation moderated, with a price index for consumer spending dipping 0.1 percent after nudging up 0.1 percent in January. In the 12 months through February, the personal consumption expenditures price index increased 1.0 percent after rising 1.2 percent in January.

In the same interview, Pimco's global economic advisor, Joachim Fels, said: "I think Janet Yellen is clearly concerned over this zombification of the economy. I think the message was very clear. She wants inflation, and inflation expectations, higher; she is not convinced the pickup in U.S. inflation will last."

Fels also said the Fed will try to overshoot its 2 percent inflation target before adopting more aggressive monetary policy. "I think the problem is, the longer you keep interest rates so low, the bigger is the risk that inflation expectations actually drift lower. They would like to raise interest rates, but they can only do this if, and when, inflation has started to rise."

— Reuters contributed to this report.