June 7, 2019 / 2:52 PM / 11 days ago

Fed may find it hard to resist interest rate 'insurance cut' this summer: El-Erian

FILE PHOTO: Mohamed El-Erian, Chief Economic Advisor of Allianz and Former Chairman of President Obama's Global Development Council, speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2017. REUTERS/Lucy Nicholson

(Reuters) - The U.S. Federal Reserve may find it hard to resist an “insurance cut” in interest rates this summer, Mohamed El-Erian, chief economic adviser at Allianz, said after the U.S. Labor Department issued a dismal payrolls report on Friday.

“The case for an interest rate ‘insurance cut’ this summer is building to a point that makes it hard for the Fed to resist,” El-Erian told Reuters.

“This weaker-than-expected jobs report, and notably so, will fuel concerns about what has been an impressively solid U.S. economy to date. This would also be a development that would increase the general headwinds facing the global economy.”

Reporting By Jennifer Ablan; Editing by Chizu Nomiyama

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