El-Erian: Expect new Fed 'linguistic gymnastics'

Janet Yellen

Former Pimco co-CEO Mohamed El-Erian predicts the Fed will remove the word "patient" from its policy statement, but could open up another can of worms.

But he added in a CNBC interview: "We're going to see another round of 'linguistic gymnastics.' So I wouldn't be surprised if this notion of the Fed having to be 'sufficiently confident about inflation' creeps in as a way of keeping markets from rushing" to judgment on when interest rates might be increased.

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The Fed ends its two-day meeting with its policy statement Wednesday that will summarize its economic projections, and a news conference by central bank chief Janet Yellen. Many market-participants see June as the target month for the first rate hike since 2006. The Fed started cutting rates to their current near zero percent levels in 2007 and 2008 because of the recession.

Central bankers are going to do their "utmost to make sure markets focus on the journey," rather than the exact timing of the first expected move, said El-Erian, chief economic adviser at Germany-based Allianz, which is the parent of company Pimco. He spoke in an interview on " Squawk Box ."

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