"I think the Fed will probably lift rates either in September or perhaps a little bit later," said Anthony Chan. He said weak economic data might possibly delay a hike announcement until the December meeting.
Short-term interest rates have remained close to zero for over six years in an effort to boost economic growth during the aftermath of the 2008 recession. Low rates reduce borrowing costs for corporations, spurring greater investments.
Consumer spending remained flat in April, compared to March's 0.5% gain, which was revised higher from a previously reported 0.4% jump, according to a report from the Commerce Department on Monday.
"You basically saw no consumer spending, even though there was an upward revision to the prior month," Chan said. "It's sort of like throwing a party and consumer forgot to come. A lot of them got dressed, because we got a slight upward revision, but very few came to the party. I think the Federal Reserve can [lift rates] in September or maybe a little later in December."
Meanwhile, personal income rose 0.4% during April, while the personal savings rate jumped to 5.6%, compared to 5.2% in March. A cautious consumer who saves and doesn't spend poses a threat to economic growth, as consumer spending drives two-thirds of gross domestic product.
"The higher savings rate is a little disturbing, but that's a monthly number and there's a lot of volatility surrounding this," Chan said. "Personal income was stronger than the market expected, which is somewhat encouraging and if that's followed through by much faster employment growth, I think it's just a matter of time before consumers actually go out there and start spending money."
The next reading on the strength of the labor market is released Friday, when the Bureau of Labor Statistics reveals its May jobs report. Economists expect the addition of 220,000 jobs during the month.