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CNBC EXCLUSIVE: CNBC EXCERPTS: CNBC'S STEVE LIESMAN SITS DOWN WITH CHICAGO FEDERAL RESERVE PRESIDENT CHARLES EVANS TODAY ON "SQUAWK BOX"

WHEN: TODAY, TUESDAY, AUGUST 30TH

WHERE: CNBC'S "SQUAWK BOX"

Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Chicago Federal Reserve President Charles Evans today on CNBC's "Squawk Box." All references must be sourced to CNBC.

Chicago Fed: Economy in Liquidity Trap: http://video.cnbc.com/gallery/?video=3000042403

Chicago Fed Pres: Monetary Policy Criticized: http://video.cnbc.com/gallery/?video=3000042694

EVANS ON THE ECONOMIC RECOVERY:

"I AM SOMEWHAT NERVOUS ABOUT THE ECONOMIC RECOVERY AND WHERE WE STAND AT THIS POINT 2 YEARS AFTER WE BOTTOMED OUT THE 1ST HALF OF THIS YEAR GOT REVISED DOWN AND WE HAD VERY WEAK GROWTH IT WAS ABOUT .7% ON AN ANNUALIZED WE HAD BEEN HOPING TO ACHIEVE SOMETHING MUCH MORE LIKE A LAUNCH OR ESCAPE VELOCITY."

EVANS ON THE LABOR MARKET:

"IT IS DIFFICULT TO CHARACTERIZE THE LABOR MARKET AS ANYTHING BUT BEING CONSISTENT WITH BEING IN A RECESSION, AT 9.1% UNEMPLOYMENT IT IS VERY MUCH OF A CONCERN TO ME. EMPLOYMENT GROWTH HAS BEEN VERY WEAK. THE ECONOMY IS GROWING BUT IT IS A VERY SMALL POSITIVE WE HAVE REALLY BEEN GOING SIDEWAYS MORE THAN ANYTHING ELSE."

EVANS ON THE U.S. NOT BEING IN A RECESSION:

"WE ARE NOT TECHNICALLY IN A RECESSION WE HAVE SEEN GROWTH AND MOST RECENT GROWTH HAS BEEN POSITIVE BUT WE ARE MOVING SIDEWAYS MORE THAN ANYTHING ELSE AND I THINK WE ARE KIDDING OURSELVES UNLESS WE LOOK AT THE LABOR MARKET AND SAY YOU KNOW THIS IS NOT A GOOD SITUATION."

EVANS ON THE ECONOMY BEING IN A LIQUIDITY TRAP:

"I THINK THE ECONOMY IS REALLY IN A BIT OF A LIQUIDITY TRAP, INTEREST RATES ARE AT 0% FOR POLICY RATES AND EVERYTHING ELSE EQUAL WE REALLY NEED A LOWER REAL INTEREST RATE IN ORDER TO EQUILIBRATE SAVINGS AND INVESTMENTS."

EVANS ON CLEARER ECONOMIC MARKERS:

"I FAVOR BEING MUCH CLEARER AND SPECIFIC ABOUT THE ECONOMIC MARKERS THAT IT WOULD TAKE TO ALTER THAT WHAT I WOULD PREFER AND IN FACT I ARGUE FOR SOMETHING LIKE THIS JUST RECENTLY IS TO SAY THAT WE COULD ALLOW RATES TO REMAIN LOW UNTIL THE UNEMPLOYMENT RATE FELL TO A CERTAIN LEVEL OR IF INFLATION BECAME TREMENDOUSLY UNACCEPTABLE AT A HIGHER RATE."

EVANS BEING ACCOMMODATING:

"AT THE END OF THE DAY I AM VERY LIKELY TO FOLLOW THE CHAIRMAN'S LEADERSHIP BUT IT IS MY ROLE TO OFFER A PARTICULAR TYPE OF ADVICE THAT MAYBE THE DUAL MANDATE TELLS US THAT WE NEED TO BE MORE ACCOMMODATING THAN WE HAVE BEEN"

EVANS ON BENCHMARK:

THE FEDERAL RESERVE HAS A DUAL MANDATE. THE FEDERAL RESERVE ACT INSTRUCTS US TO MAINTAIN MONETARY AND FINANCIAL CONDITIONS TO PROMOTE MAXIMUM EMPLOYMENT AND PRICE STABILITY. WE LARGELY -- THE OBJECTIVE FOR INFLATION IS ABOUT TWO PERCENT...WE'VE ALREADY EXPERIENCED 1%. WE OUGHT TO BE SYMMETRIC IN OUR ATTITUDES. AND SO IF 1% IS NOT A CATASTROPHE -- 3% IS NOT A CATASTROPHE.

EVANS ON COMMODITY PRICES NOT BEING LINKED TO MONETARY POLICY:

THE FACT THAT OIL PRICES AND COMMODITY PRICES AND FOOD PRICES HAVE MOVED DOWN SOMEWHAT YES OF COURSE THAT IS A GOOD THING FOR CONSUMERS BUT TO LINK THAT TO MONETARY POLICY, WE SHOULD STILL HAVE THOSE INFLUENCES ON COMMODITY PRICES BUT WE HAVEN'T AND THAT IS WHY I SAY THAT MONETARY POLICY IS UNLIKELY TO BE A CONTRIBUTOR TO THAT."

EVANS ON MONETARY POLICY BEING A BLUNT TOOL:

"MONETARY POLICY IS A VERY BLUNT TOOL IT IS ONLY ONE TOOL AND WHEN YOU HAVE MULTIPLE OBJECTIVES YOU CAN'T ACHIEVE EVERYTHING THAT YOU NEED."

EVANS ON CHINA AND INDIA:

"I THINK THAT IT IS VERY SURPRISING THAT ANYBODY COULD CHARACTERIZE THE INCREASE IN COMMODITY PRICES AS DUE TO A BIT OF ADDITIONAL ACCOMMODATION THAT THE FED SUPPLIED, WHEN YOU LOOK AT CHINA AND INDIA, EMERGING MARKETS OVER A BILLION PEOPLE ARE COMING ON LINE AND PUTTING PRESSURE ON SCARCE RESOURCES, THEY ARE BUILDING THEIR INFRASTRUCTURE IN CHINA, THAT IS OBVIOUSLY PUTTING TREMENDOUS PRESSURE ON COMMODITIES AND ENERGY IN A WAY THAT SMALL MOVEMENTS IN MONETARY POLICY COULD NOT EVEN POSSIBLY HAVE THAT EFFECT."

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