The Federal Reserve may start tapering its quantitative easing (QE) as soon as next month, but it is unlikely to raise interest rates until at least 2016, says Pimco CEO Mohamed El-Erian.

With the federal government unable to agree on steps to boost the economy, the Fed has to step in to make sure the recovery continues, El-Erian said at an economic conference Wednesday, the Los Angeles Times reports.

And that means the central bank will probably keep its federal funds rate target at zero to 0.25 percent, a record low, until 2016, El-Erian explained.

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The Fed has said it will likely maintain that target level until the unemployment rate drops to 6.5 percent. It was 7.4 percent in July, and the Fed's economic forecast doesn't envision it falling below 6.5 percent until at least 2015.

With interest rates having soared on talk that the Fed will soon taper, the central bank must now use its forward guidance to emphasize that it will maintain its highly accommodative stance, El-Erian noted.

"The minute that the Fed started talking about tapering ... you saw interest rates taking off. We have now priced in as a market a significant tapering starting as early as September," he stated.

"We are in a period where the Fed ... is using experimental policies that have not been tested," he added.

Meanwhile, the Fed's talk of curbing QE has caused it to lose control of long-term interest rates, Joel Naroff, president of Naroff Economic Advisors, told Newsmax TV in an exclusive interview.

The 10-year Treasury yield has jumped to 2.86 percent from 1.66 percent May 2.

"The second that they [the Fed] started talking about tapering, that's when the markets have taken back over," Naroff said.

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