The latest U.S. jobs report has thrown another wrench in the Fed’s plans to cut interest rates, but economists say that might not be the worst part.

In May, the U.S. economy added 272,000 jobs—higher than expected. This leaves the Fed even more uncertain about its next move, according to Cambridge president and macro adviser Mohamed El-Erian

“The Federal Reserve will be more nervous about its policy prospects and, therefore, will take a July cut off the table,” he wrote.

In El-Erian’s view, the Fed is “nervous” because it lacks a clear framework for evaluating whether interest rate cuts are warranted.

“Economists have a lot of hard work to do in reconciling conflicting macro data releases,” he said, referring to the seemingly Jekyll and Hyde nature of the economy.

Although hiring remains strong, El-Erian recently pointed to a sharp slowdown in retail sales and manufacturing as a sign that the U.S. economy was losing momentum.

“All that is saying to us is that the economy is slowing much faster than most people expected, including the Fed,” he told Fox News in a recent interview.

According to El-Erian, the Fed has backed itself into a corner—and it’s entirely its own doing.

The real problem with the Fed

Central banks in Canada and Europe diverged from the Fed this week when they voted to lower interest rates despite lingering inflation risks.

Unlike the Bank of Canada and European Central Bank, the Fed is hyper-fixated on its 2% inflation target, making it harder for U.S. policymakers to respond to changes in the economy.

El-Erian told CNBC in April that the Fed “should be more strategic” about setting interest rates. By being overly data-dependent, the Fed “has turned into a play-by-play commentator” instead of being a strategic player.

The other problem? There’s no economic backing behind a stubborn 2% inflation target.

That’s the view of Nobel Prize-winning economist Joseph Stiglitz, who believes the Fed raised interest rates too aggressively to a level that “distorts the economy not only here at home but globally.”

Several economists, including Harvard’s Jason Furman and Moody’s Mark Zandi, believe the Fed could achieve its goals with a slightly higher inflation target. But policymakers don’t see it that way.

Although the Fed has been targeting 2% inflation since the 1990s, the target was first made public in 2012 following the financial crisis.

The Fed will give an update on its interest rate forecasts at its forthcoming policy meeting on June 11-12.