Monday on CNBC’s “Squawk Alley,” network CME floor reporter Rick Santelli offered his thoughts on the day’s dramatic sell-off in U.S. stocks, which is tied to fears about the fall of the Chinese economy.

According to Santelli, there’s a disconnect in the real value of these equities because the Federal Reserve has kept interest rates low and that is pumping up the value of the stock market. Until the Fed adjusts interest rates to reflect fair market value, the true value of stocks cannot be determined.

“What about this is all going to affect the economy at-large?” Santelli said. “Well, when we were moving up and many were saying that the fundamentals were mismatched with the price level of the equity markets, there was very little trickle up. I suspect that it will be very much balanced in terms of not much true economic trickle down. What we will find is a way to calibrate the true value of stocks when the Fed comes up with the true value of interest rates and we’ll get the true value of stocks.

“Further, many think that central banks around the globe are going to start selling like China, like Japan because they need to,” he continued. “Look at what investors have done, like [UBS Director of Floor Operations] Art Cashin says, you don’t sell what you want to, you sell what you can. On this one, though, I think I’d put an asterisk. I don’t think foreign central banks are going to sell. Such a wonderful trade that they’ve been holding in terms of treasuries. Why is there so much in the way of stock moves that dwarf the bitty moves in Treasury? And this is pretty evident.”

Santelli went on with a plea to Federal Reserve Chairwoman Janet Yellen concerning U.S. monetary policy.

“The markets are making an adjustment. Janet Yellen, please, let the markets do it. Don’t put the markets through this again,” Santelli added. “One of the reasons you’re seeing big moves in things like the yen against the Dollar and the Euro against the Dollar is because there’s a short position created for carry trades. Yes. But there is another side to this. It doesn’t matter how the values get up here. This is a recalibration trade now that currencies are recalibrating in favor of the dollar. Listen, I only made it through about half but you get the idea. You’re dealt a hand, play it. Don’t live in denial.”

(h/t RCP Video)

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