Calculated Risk quoting a M-L report:

It is now clear that June is very much on the table. What is less clear is whether the Fed is just protesting the super-low probability priced into the markets or is setting us up for a June hike. In other words, should we stick to our September call or flip flop?

We are sticking to September. In our view, the distribution of outcomes is very flat, but September still seems most consistent with Yellen’s high risk aversion. June seems a bit early given how dovish she has sounded. Moreover, with the market pricing in just a 34% chance of a move, it would shock the markets and bring into question their credibility. This would draw attention to the competence of the Fed during an election year. The Fed would also be moving in front of the Brexit vote, a potential serious shock to financial markets. What is the cost of waiting?

July is also live, but suffers the usual problem of not having a scheduled press conference. The Fed has made it clear that they can call a press conference on short notice. However, it would still require meticulous preparation from Yellen. ...

This is a close call and we will be nimble going forward. Payrolls on June 2nd and a Yellen speech on June 6th could change our mind. In our view, the Fed will want the market to be pricing in at least a 50% probability before it moves and hawkish news from these events could do the trick. Regardless of the exact timing, we think the economy and inflation are a lot more resilient than the markets believe. Hence, the Fed is likely to hike more than what the bond market is pricing in over the next several years

It's still the popular press pushing for a rate hike ASAP rather than Yellen or the bond market.

FWIW.

Cheers,
Scott.

The economy isn't overheating. There's absolutely no reason to believe that the Fed would let inflation get out of control. There's no reason at all why they can't wait.

But, the default thinking of most of the people in the FOMC seems to be that rates need to go up, because rates need to go up. It doesn't matter that wages are still historically stagnant, rates need to go up, because shut up that's why.

It's madness.

I've seen some arguments that rates need to go up so that they can be cut when the US economy goes into recession again. But since there's no sign of a recession anytime soon (the economy isn't overheating, and shocks are by definition unpredictable, and the economy is still weak, etc.), that doesn't strike me as an argument that should have control of the near-term decision making.

It's like the "We have to cut Social Security now because it'll be broke in 30 years if we don't do anything and then we'd have to cut benefits!!" argument.

My $0.02.

Cheers,
Scott.