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Fed's Evans: We may be ripe for rate hike, but...

Matthew J. Belvedere

Chicago Federal Reserve President Charles Evans said Friday the much stronger-than-expected October employment report is "very good news," but he's still not ready to say it's time for an interest-rate hike.

In a CNBC interview shortly after the Labor Department released the jobs report, Evans said the data support his 2016 economic outlook of 2.5 percent growth.

Addressing whether the Fed should hike interest rates next month, the dovish Fed official acknowledged, "We've indicated that conditions look like they could be ripe of an increase."

"[But] my continued preference for more delay or a shallower path ... [is] my uncertainty over whether ... inflation is going to get up to our 2 percent objective within reasonable amount of time," he said on " Squawk Box ."

He added he's also a "little bit worried about downside risk with the weak foreign economy."

Evans, a voting member this year on the central bank's policymaking panel, wants financial markets to focus on the path for rates, not the exact timing of the initial move.

The Fed needs to have communications that "indicate the path is going to be gradual," he said.

The October employment report and the upcoming November data could hold the keys to whether the Fed will increase rates at its mid-December meeting.

Read More BOOM! Big rebound in job creation for October

Contained in Friday's Bureau of Labor Statistics jobs report, average hourly earnings increased a solid 9 cents an hour last month, which represents an annualized gain of 2.5 percent.

The headline nonfarm payrolls number was a gain of 271,000 for October, with the unemployment rate dipping to 5 percent.

There's still "little bit of slack" in the jobless number, Evans said. "[But] strong wage growth would be a very helpful ... pushing inflation up to 2 percent, which is what we need."

This week, Fed Chair Janet Yellen told a House panel there's a "live possibility" next month for a rate hike.

While preferring "more delay or a shallower path," Evans also told CNBC Friday: "I've gone in with an open mind to every meeting. So they've been live."




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