The Federal Reserve may raise interest rates in September, but wih great difficulty with much of the world lowering rates and devaluing currency, Nuveen Asset Management's Bob Doll said Wednesday.
China's surprise decision to devalue its currency on Tuesday presented the latest challenge to the Fed's anticipated liftoff at a time when Europe and Japan are easing monetary policy. The falling Chinese yuan has dragged down other growth-linked currencies, including Australia and New Zealand.
"Everybody knew September was a more than 50 percent chance the Fed was going to go," Doll told CNBC's "Squawk Box." "You've got to wonder, is this going to make it less than 50 percent? Are they really going to listen to things outside the U.S.?"
The Fed has held its benchmark interest rate near zero since December 2008. The CME FedWatch tool—which tracks market reaction on potential changes to the fed funds target rate—showed a 45 percent likelihood of a rate hike in September, down slightly from earlier this week.
The devaluation and China's recent intervention in its stock markets following a 30 percent correction underscore a massive growth problem for the country, said Doll, Nuveen's chief equity strategist. China is currently grappling with consumption challenges, mounting inventories and net capital outflows, he noted.
That slowdown will affect Asia-Pacific first, Europe next, and the United States the least, he said.
"The optimist in me says, don't forget the United States is 87 percent a domestic economy, which is generally doing better. The consumer is doing a little better. Jobs have improved," he said.
"I don't want to take anything away from the concern. It's a legitimate concern. If this develops into a currency war, we've got issues. There's not question about it," Doll said.