Widely followed economist Mohamed El-Erian said Friday that the market is expecting too many cuts from the Federal Reserve this year after the United States economy added more jobs than expected in June.
The market is expecting too many cuts from the Federal Reserve this year, widely followed economist Mohamed El-Erian said Friday.
"We as the market base have gotten carried away — carried away thinking it will be 50 basis points in July, thinking we're going to get three cuts by the end of the year," El-Erian said on CNBC's "The Exchange." "We're going to get one in July and maybe, maybe two, and that's about it." The Allianz chief economic advisor's statements came on the heels of a better-than-expected monthly jobs report., according to data from the Bureau of Labor Statistics released Friday morning. Economists polled by Dow Jones expected 165,000 jobs.
Stocks fell after the report, amid concerns that the strong number would lead the Fed to hold off on rate cuts., telling CNBC in March that the country will not see a recession this year or in 2020 barring a major policy mistake from the Federal Reserve. "I think you're going to get a 25-basis-point cut this month," El-Erian said on Friday. "I think putting it as an 'insurance rate cut' is the right way. The economy is not in trouble. Today's employment report is actually very good news for the economy, and it's good news long term for the markets."
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