El-Erian Sees Two Fed Rate Cuts This Year Despite Strong Data

Mohamed El-Erian still expects Federal Reserve officials to cut interest rates twice this year, even as a blockbuster jobs report pushes traders to rethink the timing.

While rate reductions in the U.S. may not come as early as some on Wall Street had forecast, the Fed is likely to look past signs of economic resilience and start easing its monetary policy, El-Erian, the president of Queens’ College, Cambridge and a Bloomberg Opinion columnist, said on Bloomberg Television.

“If this Fed is continuously overly data dependent, then maybe we don’t get cuts,” he said. “But I am hoping that they will see through the backward-looking data and look forward.”

Treasuries plunged, pushing yields higher, after an advance in U.S. nonfarm payrolls in March exceeded all expectations in a Bloomberg survey of economists.