Mohamed El-Erian says markets need to stop their 'love affair' with a Fed pivot

El-Erian said markets need to end their love affair with the Fed if it were to change course.

He told CNBC on Monday that they have to stop with the pivot.

The Federal Reserve's ability to balance high inflation, employment and financial stability was suggested by the chief economic adviser.

His comments came in response to the debacle surrounding Credit Suisse and whether optimistic futures on the bank's shares suggest investors are anticipating the Fed will reduce interest rates.

The financial health of Credit Suisse has come into question. There was panic about the bank potentially suffering a Lehman Brothers-style collapse as it finalizes a restructuring plan.

El-Erian said that the Fed won't change course on its current policy unless there's a problem with the economy. He said that if the Fed pivots it would be because of an economic accident or market accident.

The Fed is trying to stamp out inflation by raising interest rates quickly. Its tight monetary policy has already included three outsized 75-basis-point rate hikes, a 50-basis-point rate hike, and a 25-basis-point rate hike, with markets expecting the central bank to lift rates again next month and early next year.

The Bank of England's plan to purchase long-dated UK government bonds last week has caused the focus to shift to the Fed easing its hand on rate increases.

While El-Erian did not rule out a Fed pivot, others such as a UN trade group urged central banks to be careful with their monetary policy.