The Fed's first interest rate hike of 2017 is likely to come next month because of inflation indicators and Fed Chair Janet Yellen's congressional hearing, analyst Peter Boockvar told CNBC on Thursday.
"I think March is a done deal. I think Yellen in her nice, soft, clear way said it was a done deal. And I think yesterday's CPI number clinched it," the Lindsey Group chief market analyst said on "Squawk Box."
The Bureau of Labor Statistics reported Wednesday that the Consumer Price Index jumped 0.6 percent in January, the largest increase since February 2013. The number reflected rising prices on gasoline and other goods, indicating rising inflationary pressures.
Boockvar said the market's expectations are not fully adjusted for a rate hike because the Fed's reputation has become that of "the boy who cried rate."
"They've trained the markets not to believe when they're going to raise rates," Boockvar said, adding that Yellen would be well served to give the market a stronger indication if she anticipates a March hike. The Fed's next policy meeting is March 14-15.
Some kind of hint from the Fed would be especially critical considering the Trump administration's tax reform proposal, which could be offset by a hike, the analyst said.
"If the total tax package happens, ... earnings [go] up like 6, 7 percent. The stock market's rallied about 9 percent, so we pretty much priced in the expected earnings growth rate," Boockvar said.
"What I don't think we've priced in is the offset of what happens with interest rates," he continued. "It's this tug of war between fiscal stimulus and monetary headwinds."