Markets to Fed: You don’t have our blessing to hike yet, Jurrien Timmer says

The odds of a Federal Reserve rate increase have risen recently, but financial markets still haven't given the central bank a green light to keep tightening, Jurrien Timmer of Fidelity Investments said Monday.

"I don't think the market is giving the Fed a blessing at all. I think the Fed is testing the waters to see if they can get away with a June hike, and so far, at 30 percent odds, we're not quite there yet," the company's director of global macro told CNBC's "Squawk Box."

The chances of a rate hike were brought up by increasingly hawkish remarks from Fed officials, most recently St. Louis Fed President James Bullard.

Bullard, a voting member of the central bank's policymaking committee, said in a Monday speech that a relatively tight labor market in the United States may put upward pressure on inflation, raising the case for higher interest rates.

"Labor markets are relatively tight. This may put upward pressure on inflation going forward," he said. "This is an important factor supporting the FOMC view on the expected path of the policy rate."

The central bank has not raised interest rates since December, when it hiked for the first time since 2006.

That said, this may not mean the market can handle another rate hike, Peter Boockvar, chief market analyst at The Lindsey Group, said in the same interview.

"I don't think the markets are ever ready for a Fed rate hike, particularly in this context. [We're] seven year into a bull market and [in] the second-longest of all time," he said. "I think the skittishness in markets ... is sending us a signal that maybe they're not."

U.S. equities are mostly flat for the year, despite a roller-coaster ride, with the Dow Jones industrial average and the S&P 500 index up roughly 0.4 percent. Meanwhile, the Nasdaq composite has fallen nearly 5 percent year to date.

— Reuters contributed to this report.