Economist Mohamed El-Erian says the market is expecting too many cuts from the Federal Reserve this year.

“We as the market base have gotten carried away — carried away thinking it will be 50 basis points in July, thinking we’re going to get three cuts by the end of the year,” El-Erian told CNBC.

“We’re going to get one in July and maybe, maybe two, and that’s about it,” said El-Erian, also a Bloomberg Opinion columnist and Allianz chief economic adviser.

“I think you’re going to get a 25-basis-point cut this month,” El-Erian said. “I think putting it as an ‘insurance rate cut’ is the right way. The economy is not in trouble. Today’s employment report is actually very good news for the economy, and it’s good news long term for the markets,” said E-Erian, also a Newsmax Finance Insider.

The Federal Reserve was divided on projections for a rate cut this year at its last meeting, but the market is still expecting a cut in July even after the strong jobs report, CNBC.com reported, citing the CME Fed Watch tool.

El-Erian said the previous signals the Fed has sent about a cut are a reason why one may be coming.

“They cannot afford another miscommunication,” El-Erian said.

The next meeting for the Federal Open Market Committee is scheduled for July 30 and 31.

To be sure, U.S. employers are hiring workers, but that is only making the Fed's job harder.

On Friday, the Labor Department said nonfarm employers added 224,000 jobs last month - the most in five months, and not the kind of labor market that would normally cause the U.S. central bank to cut interest rates.

Continuing jobs gains make Fed policymakers' debate over whether the economy needs stimulus even more difficult, setting up a possible standoff with markets at their July 30-31 meeting.

"They are in a bit of a bind," Karim Basta, chief economist at III Capital Management, told Reuters. "On the surface, the data, in my opinion, doesn't really support an imminent cut, but markets are expecting it, and I do think there's a risk at this stage that they disappoint."

Meanwhile, the Fed is sending fairly optimistic economic signals after opening up the possibility of cuts last month, when they cited muted inflation pressures and an economic outlook clouded by a U.S. trade war and slower global growth.

In its semi-annual report to Congress, the Fed on Friday repeated its pledge to "act as appropriate" to sustain the economic expansion, with possible rate cuts in coming months, but they notably cited a strengthening jobs market and described recent weak inflation as due to "transitory influences."

Markets are overwhelmingly betting the Fed's next move will be its first rate cut since the financial crisis a decade ago. President Donald Trump on Friday renewed demands for lower rates to strengthen the economy.

Fed Chairman Jerome Powell, who will testify before Congress on Wednesday and Thursday, has repeatedly said the Fed makes decisions independently from markets and the White House, but failing to deliver a cut could cause a stock and short-term bond selloff and hurt the economy.

U.S. rates futures fell after the jobs report. Markets still see a rate cut this month as a near-certainty, though they largely priced out chances for an aggressive half-percentage-point cut.

"A rate cut in July is still all but inevitable," said Luke Bartholomew, investment strategist for Aberdeen Standard Investments. "Employment growth remains a bright spot amid a fairly mixed bag of U.S. data and yet markets have come to expect a cut now so (they) will fall out of bed if they don't get one."

The U.S. has not resolved its trade dispute with China, but the two countries agreed last weekend to resume trade talks, putting off new tariffs.