The latest measures to address Europe's debt crisis are an important step forward, but fall considerably short of what is needed, Pimco CEO Mohamed El-Erian told CNBC.
As a result, the bond fund leader expects Friday's likely aggressive stock market rally to be short-lived as the weaknesses emerge in the plan devised at this week's euro zone summit.
"The leaders took important decisions that went well beyond market expectations," El-Erian said in a CNBC "Squawk Box" appearance. But, he added, "Our assessment is this is not yet the breakthrough. More is yet required. Therefore there's the risk that once again this rally may run out of steam."
Stock market futures were projecting gains in excess of 1 percent when the U.S. market opens, sparked by overnight news that leaders had reached agreement on dealing with debt burdens in peripheral euro zone nations.
The agreement will allow the European Financial Stability Facility and its successor, the European Stability Mechanism, to lend directly to banks and, via the European Central Bank , buy euro zone bonds in the primary and secondary markets.
While that addresses some of the main problems in relieving Greece and other nations of onerous debt burdens, questions remain over implementation.
"The roadmap to fiscal union, political union, and banking union lacks details and lacks commitment," El-Erian said.
As a result, he advised investors to be cautious, echoing the sentiments of his Pimco counterpart, Bill Gross, who told CNBC on Thursday that U.S. assets — Treasurys in particular — remain the most reliable bet amid the global turmoil.
"For us, Treasurys are the cleanest dirty shirt. What you want right now as an investor is you want to be high in quality across the board, whether it's equities or bonds," El-Erian said. "Second, you want the opportunity to pick up cheap investments, because you're going to have that opportunity going forward."