Mohamed El-Erian: Yellen's 7 Reasons to Expect a 2015 Rate Increase, could hike in September

Mohamed El-Erian gives 7 reasons to expect a 2015 rate increase. *Timing: Based on what Yellen knows today she is inclined to initiate the Fed's hiking cycle this year, possibly September. *Rationale: Although wage growth remains too muted, Yellen anticipates the labour market will strengthen further. *Not just cyclical: Yellen seems to be warming to the notion that the US economy faces more than cyclical headwinds. *International context: Although the Greek crisis is of concern, Yellen doesn't believe that its effects are limited to the downside. She also sees upside risk for Europe. *Format: The Fed chief provided further indications that this would not be a traditional cycle. Instead, it is likely to involve a new kind of stop-go pattern. *Terminal point: Yellen also is warming to the idea that the increases could end with a policy interest rate that is well below historical averages. *Global divergence: While concerns about the strength of the dollar could re-emerge, they weren't described as an impediment to initiating the interest rate hiking cycle this year. Full Story (VIEW LINK)