The Fed may be forced to 'reverse course' if it appeases markets with big rate cuts, Mohamed El-Erian says

• If the Fed appeases the market, it could risk a sharp reversal later, Mohamed El-Erian wrote in the FT.
• The more the Fed gives in to investors on rate cuts next year, the more they will press for even more dovishness.
• "If investors price in additional rate cuts, it is harder for the Fed to pursue its mandate without a big market reaction."

Markets are jubilant about a Federal Reserve policy pivot to rate cuts next year, but there's a risk of the central bankers giving into those expectations, according to economist Mohamed El-Erian.