Mohamed A. El-Erian , Columnist

Markets May Have Overreacted to a Weak Jobs Report

The conclusion that the Fed won't raise rates this year could be premature.

June 6, 2016 at 11:55 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Open to interpretation.
Photographer: Mandel Ngan/AFP/Getty Images

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The very sharp drop in yields on U.S. Treasuries on Friday suggests that the fixed-income markets have interpreted the last week’s disappointing jobs report as an indication that the economy is facing diminishing demand momentum. As a result, traders significantly lowered their expectations of an interest-rate hike by the Federal Reserve this summer, which also drove down yields elsewhere in the world.

QuickTake The Fed Lifts Off