TIP - El-Erian Says Market Justified In Worrying About Economic Growth If 2 To 3 Fed Rate Cuts Don't Happen This Year: 'Last Mile Getting To 2% Is Really Really Difficult' | Benzinga
Federal Reserve Chair Jerome Powell was cheered by the market on Wednesday for acknowledging the possibility of a Fed funds rate cut this year. Economist Mohamed El-Erian shared his views on the near-term direction of interest rates.
What Happened: El-Erian stated in an interview with CNBC that he expects the Fed to implement two to three rate cuts this year, maintaining his previous stance on rate expectations. “That would be appropriate,” he said. “If we don’t see any cuts, which is increasingly concerning to the market, then the market is justified in worrying about economic growth and earnings. However, we should expect two to three cuts.”
The economist also discussed whether the Fed should consider global economic conditions when setting interest rates or focus solely on domestic issues. He highlighted China’s deflationary challenges and the risk of falling into the “middle-income trap.”
El-Erian ...