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Hard to sense Fed's rate hike path: Pimco advisor

The Federal Reserve faces challenges communicating its intended path of interest rate increases, and saying it is data dependent does not provide enough guidance for markets, Pimco global strategic advisor Richard Clarida said Wednesday.

The Federal Open Market Committee will announce Thursday whether it will raise its benchmark fed funds rate for the first time in more than nine years. Fed Chair Janet Yellen has said the committee's decision remains dependent on how economic data impact the central bank's employment and inflation targets.

"I think the real issue here is Janet Yellen likes to say she's data dependent, but data dependence is not a monetary policy," Clarida told CNBC's "Squawk Box."

"You get fluctuations in foreign equities or credit spreads widen here, it's very hard for the markets to sense what is the reaction function of the Fed, what will be that path?"

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Unemployment has fallen to 5.1 percent, indicating the country is nearing full employment, but inflation remains well below the Fed's 2 percent target.

Still, Clarida noted Fed Vice Chair Stanley Fischer recently said the Fed has good reason to hit its inflation target.

"I think that's the sort of communication we need from this Fed. What are they looking at? What judgments are they forming on that?" he said.

Clarida said the chances the Fed will announce a rate hike Thursday are less than 50 percent.

The Fed may push its first rate hike off until December, or even January, Philip Guarco, JPMorgan Private Bank's managing director, told "Squawk Box."

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Were the Fed's decision based solely on domestic data, it would likely raise rates, he added. But a combination of external factors—including a slowing Chinese economy, the impact of falling commodity prices on resource-producing countries, and general sluggishness in emerging markets—have already produced much of the economic effects that a rate hike would have produced, he explained.

One thing that is clear: Interest rates will remain near historically low standards as large debt loads and demographic issues in developed markets depress growth levels, Guarco said.

At the same time, emerging markets are exporting disinflation due to lower commodity prices and China's devaluation of its currency, putting more pressure on interest rates, he said.