NEW YORK ( TheStreet) -- The Federal Reserve is likely to announce a rate hike during its September meeting, according to analysis from Liz Ann Sonders, Charles Schwab's (SCHW - Get Report) chief investment strategist.
"Our best bet is still September," Sonders said. "Now there's been some weakening in the economic data; were that to continue and global events were to stay tumultuous, then maybe you push that [forecast] out."
Part of that softening in economic data came from the 0.3 percent decline in June retail sales, according to a report Tuesday from the Census Bureau. Economists were looking for a 0.3 percent rise. This is especially concerning since the national average for a gallon of gas stands at $2.78, compared to $3.61 last year, according to AAA. Consumers still aren't spending the savings from the pump.
Meanwhile, Fed Chair Janet Yellen told lawmakers on Wednesday in a testimony before the House Financial Services Committee that a 2015 rate hike is likely.
"A decision by the Committee to raise its target range for the federal funds rate will signal how much progress the economy has made in healing from the trauma of the financial crisis," Yellen said.
Yellen also said the first increase "should not be overemphasized."
Sonders said that he "completely agree with Yellen's message to the markets. It's not necessarily the timing of the first hike, but the timing of the path thereafter. Yellen has been very transparent in suggesting [the normalization of policy] will be a slow cycle."
Sonders said slow cycles tend to have better market returns than faster ones.
With investors fixated on the Fed, Sonders thinks a return to an earnings driven equity market is possible, once the Fed pulls the trigger.
"When the Fed starts to move policy towards something akin to normal, that may be a release valve for confidence," Sonders said. "Many view the Fed as still treating the economic patient like it's in the trauma room."
Sonders is putting money to work in the technology and financials sectors, but remains neutral on the overall U.S. equity market.