Terry Duffy, president and executive chairman at CME Group, said Tuesday he's "not as optimistic" that the Federal Reserve will be able to engineer a "soft-landing" when policymakers decide to raise interest rates for the first time in nearly a decade.
"I think we could see some knee-jerk reactions coming up either later this year or sometime next," he told CNBC's "Squawk Box" in an interview.
The CME FedWatch tool—which tracks daily market reaction on potential changes to the fed funds target rate—shows the probability of a hike shifting later in the year.
As of Tuesday, it pegs a move at the central bank's two-day June meeting, which ends Wednesday afternoon, at zero percent. July comes in at 6 percent, September at 27 percent, October 46 at percent, and December at 64 percent.
CME Group FedWatch
| Probability of an interest rate hike as June 16, 2015 | |
|---|---|
| June | 0% |
| July | 6% |
| September | 27% |
| October | 46% |
| December | 64% |
When looking into 2016, the probability of a rate hike increases dramatically.
Meanwhile, respondents to the CNBC Fed Survey continue to look for the central bank's first rate increase in September.
Read MoreThis is when Wall Street thinks Fed will hike rates
Duffy said he personally believes the Fed should act. "You don't want to move when you have, you should move when you have the ability to move."
But looking at the current inflation environment and the continued demand for U.S. bonds, he wondered whether the Fed just might sit tight for a while.
"When you look at the lack of inflation, when you look at people still pouring in to buy the U.S. debt even at these levels, I guess I'd be wondering why the Fed would move," he said.