Mohamed El-Erian believes rising volatility lies ahead for markets as central banks around the world get more aggressive in their fight against surging prices. "I don't think the market has fully internalized is other central banks are going to become a lot more hawkish," El-Erian said during an interview Monday on CNBC's " Squawk Box ." According to the Allianz chief economic advisor, the market has failed to comprehend three different ideas, including that the global economy is slowing at a much faster rate and that other central banks will become more hawkish in the future. At the same time, El-Erian said he believes the market hasn't recognized how to deal with what he calls a "world of dispersion." "You know, we're coming from a world in which everybody was subjected to the same common shock," he said. "Now we're seeing differences and you have to navigate it. So I think there's more volatility ahead, but this is going to be a really interesting time for asset managers." The comments from El-Erian came just days after Federal Reserve Chair Jerome Powell warned during an annual policy speech in Jackson Hole, Wyoming, that "some pain" could be ahead for the U.S. economy as the central bank likely continues to hike interest rates. Amid this backdrop, El-Erian said he expects headline inflation to continue to come down, although the core rate excluding food and energy will "prove uncomfortably sticky" for the central bank.