The Federal Reserve has been reluctant to raise interest rates for only the second time in a decade, not because of political bias but because the economy isn't ready, former Clinton Treasury Secretary Larry Summers told CNBC on Wednesday.

Summers was responding to GOP presidential nominee Donald Trump's claims that Fed Chair Janet Yellen is keeping rates steady to burnish the legacy of President Barack Obama by not jolting the economy.

"The Fed is completely honest [and] totally trying to do the right thing," Summers said on "Squawk Box." "Any suggestion that they're behaving politically of the kind we've seen in the campaign, I think, is ludicrous."

Yellen is the "least political person" in Washington, he added. "The political thing to do isn't to be calling for increases in rates."

The Fed chief has recently been preparing investors for the possibility of a rate hike, depending on economic data. Central bankers meet again in November and December. The futures market puts the odds of a move at 13.4 percent in November and 63 percent in December.

Summers believes the Fed should continue to stand pat. "I look at the economy, and unemployment is below target and inflation is below target as well. So that doesn't seem like the time to be stepping on the brakes."

Summers dismissed the notion that the Fed "missed its window" earlier this year to hike rates. "We haven't had a moment when inflation expectations have been anywhere near 2 percent as captured in the market."