The Fed is trapped in a deep hole and will lose more credibility on inflation no matter what it does next, Mohamed El-Erian says

• The Fed's credibility will take a hit at the next interest rate hike decision, Mohamed El-Erian wrote in a Thursday Bloomberg column.
• He said he felt strongly that the Fed's last rate hike should not have been a downshift from 50 to 25 basis points. 
• "With the Fed having already dug itself a deep hole, it is no longer crystal clear to me what the right policy step should be now."

The Federal Reserve is facing a loss of credibility no matter what policy decision it makes at its March meeting, according to top economist Mohamed El-Erian.