The Federal Reserve has suggested it will raise interest rates four times this year, but market participants aren't buying it — nor should they, Chase Chief Economist Anthony Chan said Thursday.
The Fed refrained from tightening monetary policy last September in part due to stress in overseas markets and China in particular, Chan noted. As Chinese stock market volatility and the country's currency depreciations roil equities around the world once again, central bankers are poised to tighten policy less aggressively than indicated following the Fed's initial rate hike in December.
"The situation has now reverted back to China, so I think the Federal Reserve goes back into its September [mode] and doesn't raise rates by four times," he told CNBC's "Squawk Box."
For that reason, the U.S. 10-year Treasury yield shouldn't exceed 2.5 percent by the end of 2016, he added. On Wednesday, the U.S. 10-year yield hit a more than two-month low of 2.042 percent.