Federal Reserve Being 'Held Hostage' By Global Markets

Robert Doll, Chief Equity Strategist and Senior Portfolio Manager at Nuveen Asset Management, was a guest on CNBC to explain why he believes the U.S. Federal Reserve is being "held hostage" by global markets.

According to Doll, the current economic climate is characterized as a "multiyear bottoming process for rates" while GDP growth in the US is "ho-hum" at around 2 percent while inflation data is "picking up a little bit." Based on these sets of data, he suggested the U.S. Treasury's 10-year yield hit a low at 1.37 percent and should "drift higher" than 1.70.

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Across the world, deflation is "still an issue" in Japan and parts of Europe, which is among the several reasons why the Federal Reserve has been "so slow to raise rates."

"Many of us would have argued the Fed should have gone sooner," he said in reference to the central bank raising interest rates. "They are fearful if they raise rates they are going to trigger a dollar rally and a commodity selloff."

Doll did add that he expects the Federal Reserve to "gingerly move forward." Nevertheless, the hesitation indicates the Fed is "held hostage" by global markets, although "only to a slight degree."