The Fed should hike interest rates, says SMBC's Joe Lavorgna

• Joe Lavorgna believes the Fed should hike rates now, as the economy is 'fine' and inflation risks are to the upside.
• He emphasizes that historically, inflation has only returned to target when the Fed has tightened, and current monetary policy (excluding housing) is not tight.
• Steve Liesman highlights that a hike tomorrow would be a market surprise, potentially leading to 'much more hawkish pricing' than currently anticipated.

SMBC Chief Economist Joe Lavorgna advocates for an immediate Fed interest rate hike, citing a healthy economy and persistent inflation risks. He argues that the Fed needs to 'take back' last year's easing to restore credibility, suggesting a surprise hike would be a 'mild surprise' but necessary. CNBC's Steve Liesman questions the market implications of such an untelegraphed move.