Interest rates will not only remain low, but could soon hit a ceiling in the near term, given the strong U.S. dollar, a deflationary environment and generally sluggish economies around the world, Wall Street pro Scott Minerd told CNBC on Monday.
"The era of low interest rates [will be] with us for some time given what's going on in Europe and the capital flows coming out of Europe, out of Japan," said Minerd, global chief investment officer at Guggenheim Partners, on "Squawk on the Street." "In all likelihood, this is going to put a ceiling on rates here in the near term and we're going to be prone to some sort of shock or bad news that could potentially push rates lower."
Though the Federal Reserve's Federal Open Market Committee is expected to end its purchases of government notes and mortgage bonds at its two-day meeting that concludes Wednesday, Minerd actually thinks the Fed will wait to end its policy of quantitative easing.
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"Given the appreciation of the dollar and the deflationary pressure coming out of Europe and Asia, I think it's going to cause the Fed to wait longer before they start taking action," he said. "We've always believed this was going to be a fourth quarter 2015 event. I think we may be looking at something in 2016, and you can't rule out the possibility that we could get pushed out even father."
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If inflation were to climb, though, the economy would be able to handle higher interest rates, Minerd said. But the worry is the Fed won't be nimble enough in its response to changed environment, he said.
"The risk is the Fed will do exactly what it's doing now, which is lagging, and that could set us up for some, maybe a bear market in the next decade in bonds," he said.