The Federal Reserve is unlikely to raise its benchmark interest rate in June because last week's jobs report did not provide enough evidence that wages growth is picking up—and the U.S. market loves that, UBS Investment Research's chief U.S. economist said Monday.
"This is a crazy market where if you have really strong economic numbers that would suggest that the Fed tightening would be imminent, the market would sell off," Maury Harris said on CNBC's "Squawk Box." "Give them sort of OK numbers, and they love it."
While job growth in April came in roughly in line with analyst expectations, hourly wages rose just 0.1 percent and were revised down 0.2 percent in March.
Harris sees wage inflation gathering steam, noting that the four-week average for first-time claims for unemployment insurance is at its lowest since 2000.
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"It tells me that you're going to see wage pressures pick up, that when unemployment claims are that low, that's a forward indicator," he said.
The Fed has fallen behind the curve because it must be scrupulous when it comes to determining whether the economy is strong enough to sustain an interest-rate increase, Harris said. While that lag can lead to problems because monetary policy must play catch up, he does not see foresee problems in the current tightening cycle.
The central bank has held interest rates near zero since December 2008 in a bid to encourage lending and stimulate economic growth.