Some economists are siding with Allianz’s Mohamed El-Erian, who on Tuesday said he sees an 80 percent chance the Federal Reserve raises interest rates in September if Friday’s jobs report comes in strong.
“I think he makes a good point. I think the Fed is actually pretty dovish, but they’re data-dependent and they want to keep their credibility,” Randy Anderson, chief economist at Griffin Capital, told CNBC’s “Squawk Box” on Wednesday.
The Fed has signaled it will raise rates at least once this year, after backing off earlier expectations for four increases. The central bank has not moved since December, when it lifted its benchmark Fed funds rate by a quarter of a percent from near zero.
Anderson said he believes the Fed would prefer to wait until its December meeting, but policymakers don’t want to risk missing their window to raise rates in 2016. That could happen if they hold off in September and are then delayed by some exogenous event like Britain’s surprise vote in June to leave the European Union, he said.
A third consecutive month of employment gains in excess of 200,000 positions could provide an excuse to move, according to Anderson.