They shouldn't raise it till inflation goes up a bit.
This is correct, but I'd also add I'd wait for the mortgage and municipal markets to fully recover as that is a much better sign of economic health since inflation can be a bit tricky. (Of course, it should rise with inflation obviously to avoid more easing, but we are talking about a real rate rise). The new issues of these instruments are still nowhere near where they were pre-crash, and of course mortgage markets shouldn't reach the extreme levels they were at, but we are nowhere near making up for all the loss from retired debt in this period. A rate rise won't kill it, particularly if you subscribe to Bernanke's view that there is a saving glut so they will remain low for the foreseeable future anyway, but you'd really like to see those critical economic indicators pick up. 1 was up very slightly for Q2 and I believe muni's were down once again, barely getting any new issues. That's not very good news for economic potential.
The mortgage market may be difficult to get back since that was the cause of the crisis and all the institutions broke down (thus the feds will take measures to ensure there are some structures to allow it to operate), but the other levels of government are not doing their job at all. They need to be the engine investing in infrastructure and building up their towns, but it's not happening in most places (and to be fair, it's not always their fault).
[Also worth noting, Janet Yellen cited net exports as a factor to watch, which while true, is also a bit silly at the same time. Something they might be looking at though less important than the above imo.]
