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UPDATE 1-Fed's Evans says modest U.S. adjustments not enough to offset potential shocks

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MADRID, Oct 3 (Reuters) - The outlook for the U.S. economy is "quite good" but modest monetary policy adjustments will not be enough to offset potential economic shocks, Chicago Federal Reserve Bank President Charles Evans said on Thursday.

The Fed has cut rates twice this year as U.S. businesses were hit by rising trade tensions with China, political risk including Britain's potentially chaotic divorce from the European Union, and weakening economic growth in Germany and elsewhere.

"If there is an event that shocks the world economy or the U.S. economy, these modest adjustments are not going to be nearly enough, this is very much just risk management to help make things work out better as we strive to bring in growth at about 2% (in the U.S.) over the next 18 months," Evans told a conference in Madrid.

"The U.S. economy continues to grow above trend ... U.S. economic outlook is quite good, it still has strong fundamentals," he said, adding though that trade tensions remained downside risks, potentially putting off investment decisions by companies.

On Wednesday, Wall Street's main indexes suffered their sharpest one-day declines in nearly six weeks after employment and manufacturing data suggested that the U.S.-China trade war is taking an increasing toll on the U.S. economy.

Adding to trade concerns, the United States won approval on Wednesday to levy import tariffs on $7.5 billion worth of European goods over illegal EU subsidies handed to Airbus , threatening to trigger a tit-for-tat transatlantic trade war. (Reporting by Jesús Aguado and Jose Elias Rodriguez; Editing by Andrei Khalip and Giles Elgood)