El-Erian: Fed will likely cut rates again, but it won't have much impact on the economy

'The Fed has room to cut, but do you really want to use that now when the domestic economy is still doing well?' El-Erian said.

Traders are putting the odds of a quarter-point cut at 77% at the Fed's late October meeting, according to the. In September, the Fed lowered its benchmark overnight lending rate to a target range of 1.75% to 2%, from 2% to 2.25%.

For El-Erian, a well-known economist who used to run investment giant Pimco, the questions surrounding the Fed — and other central banks — isn't whether they will issue "friendly" monetary policy amid a global economic slowdown. "The Fed has room to cut, but do you really want to use that now when the domestic economy is still doing well?" El-Erian said.

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