The United States will not head into a recession this year or in 2020 as long as there's not a "major policy mistake" from the Federal Reserve, widely followed economist Mohamed El-Erian told CNBC on Tuesday.
The "peculiar" technicals in the market have to do with Europe and what's happening with the Fed, Allianz's chief economic advisor told "Squawk Box." "This economy, unless it's disrupted by a major policy mistake, is on its way to 2.5 to 3 percent growth for this year."
El-Erian said he was concerned that the Fed last week essentially sidelined itself on interest rate hikes for this year.
"I wouldn't give up policy optionality so early," he said. "There's lot of uncertainty. It's not clear how this divergent growth is going to play out."
El-Erian's remarks are at odds with a growing list of economists and business elite predicting a downturn, as well as warning signs from the bond market.
Most economists, as well as some the world's business elite, agree that U.S. economic growth is slowing, and some predict that the global economy is headed for a recession as soon as this year.
Economists see on average a 25 percent chance of a recession within 12 months, according to a Wall Street Journal survey published in January, the highest level since October 2011 and up from just 13 percent last year.
On Friday, markets were spooked when the yield curve inverted, meaning interest rates on short-term bonds rose above those of 10-year notes, a fairly reliable recession signal. Traders say the bond market may be overreacting, while stocks seem to be ignoring the recession warnings.
El-Erian, former CEO and co-CIO of Pimco, sees signs that the economy actually has momentum. He said that while President Donald Trump's 2017 tax stimulus is weakening, business investment is picking up and the labor market is strong. "We still have job creation well above what'd you expect this time in the cycle," El-Erian said.
"There's no way there's going to be a recession," he added.
--CNBC's Patti Domm contributed to this report.