"As much as I would like to say the volatility is behind us, I expect that the volatility will return in the weeks ahead," the Allianz chief economic adviser told CNBC's "Closing Bell."
The S&P 500 has fallen more than 6 percent this year, while the CBOE Volatility Index has climbed 13 percent. However, stocks ended Friday with their best week of the year, as major U.S. averages climbed more than 2.5 percent each.
But El-Erian believes the factors that created a "perfect storm" this year have not yet dissipated, making more volatility possible. He cited factors like weakness in the global economy, concerns about the effectiveness of central banks and a lack of so-called "patient," long-term capital.
Speculation has surrounded whether global developments and market weakness could force the Federal Reserve to slow its interest rate-hiking path. So far, the Fed has signaled it will still tighten slowly, though top policymakers have acknowledged they are watching trends abroad.
On Friday, Cleveland Fed President Loretta Mester said labor market and income data "suggest that underlying U.S. economic fundamentals remain sound." El-Erian said the economy "is doing relatively well, not great."
"If the Fed was making the decision based on the U.S. as a standalone, it would continue to normalize very carefully and very slowly," El-Erian said.
He contended that the Fed "still seems inclined to hike this year" as long as financial trends around the world do not lead to "contamination" in the U.S.