Mohamed El-Erian, chief economic adviser at Allianz said he currently sees a 60 percent chance of the Federal Reserve raising the federal funds rate at its September meeting, but those odds could rise as high as 80 percent.
"What makes that probability go a lot higher a Friday report that has three things: job creation in excess of 180,000, wage growth going up and no significant move in the participation rate that pushes the unemployment rate up," El-Erian said in an interview on CNBC's "Fast Money" on Tuesday.
If Friday's jobs report meets all three of those conditions, "the case for not hiking would weaken tremendously," El-Erian said.
"It'd be very hard for them not to hike if jobs, the participation rate and wages are all saying you got to go forward because we're near full employment," he explained. Even a jobs report that met two of the three conditions would probably push the Fed to raise interest rates, according to El-Erian.
What would concern him is if the report only meets one of the three conditions El-Erian listed. He said that the Federal Reserve "should be hiking at this point ... because the domestic economy warrants it and because there's a collateral damage of running a modern economy at too low interest rates for too long."
The market doesn't see the same odds as El-Erian, as it currently prices in just a 24 percent chance of a rate hike in September and a 55.9 percent chance of one in December, according to traders tracked by the CME Group. El-Erian said, however, that current chances of a September rate hike sit at 60 percent because of international economic conditions, not domestic ones.
"While domestic conditions are flashing green, international conditions are flashing yellow. So it is the international picture that is holding back the Fed," El-Erian said.