Mohammed El-Erian sees stronger case for Sept Fed hike

Former Pimco co-head weighs in on what's next

Mohammed El-Erian says the case for a first hike in September is growing stronger but that some questions remain.

Data illustrating the continued strengthening of the labor market have increased the likelihood of a first interest rate hike in September," he wrote on his Facebook page. "If the Fed were to act only on the basis of job creation, the probability of a September rate hike would be dominant."

Yet there remain caveats. he notes that wage growth has been "frustratingly slow" and that the Fed needs to consider what's going on in the rest of the world, especially China.

"Tepid wages and the fragility of the global economy mean that, while central bank officials will continue to manage market expectations towards a September rate hike, they will keep their options open until the very last minute," he wrote.

He said a hike is "more likely than not" at this point, but not a done deal.