The market is sending signals that the Federal Reserve may not make much headway raising interest rates during the next two years—even if central bankers are intent on doing so, Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, said on Tuesday.
The Fed will not be able to raise its federal funds rate above 1.5 percent by the end of 2017, Golub said. If it tries to do so, the dollar will start to rise, putting pressure on the economy and causing the central bank to retreat.
"I would love to see the Fed be able to move toward 2 percent, but with free money in Europe, it's very hard for them to get tighter," he told CNBC's "Squawk Box." "Are we asking the permission of the Europeans for our central bank policies? I'm not sure, but the market's saying [we are]."
The Fed faces the challenge of raising rates at a time when European central bankers are suppressing rates by purchasing large amounts of bonds. That monetary policy disparity is expected to send investors flocking to U.S. bonds for higher yields, which would drive up the value of the dollar.
The greenback has already run up too far, too fast, Golub said, and while he believes the United States remains strong compared with other economies, no country can weather a 20 percent move in its currency in eight months without experiencing disruptions.
That said, Golub views the lower-for-longer rate policy as bullish for stocks. With investors looking for returns outside the bond market, he sees U.S. equities, excluding the energy sector, returning 12 to 14 percent in 2015.
"If you look at the average year that you don't have a recession, the market's up 18 percent," he said. "As long as recessionary risk is away, there's no reason you won't get double-digit price returns on the market. People are way too bearish."