The seven-year bull market has been stalled by what Timmer calls a "policy divergence" between the Federal Reserve and other central banks. It started with the People's Bank of China devaluing its currency in August, he said.
"That kind of pushed the Fed back in terms of not tightening in September," Timmer said. "This policy divergence has to kind of play itself out, and then I think we can get back on track."
The see-saw expectations for a U.S. interest rate hike are keeping markets in a holding pattern, Timmer said. The Fed raised its target interest rate for the first time in almost a decade last December, leaving rates unchanged since.
"We continue to have this back and forth," he said. "Things quieted down when the Fed went in December, then things got shaky again."
Fed Chair Janet Yellen was dovish after the central bank's March meeting last week. She cited global economic data that's given the Fed pause, despite compelling economic data out of the U.S.
The next likely Fed hike is in June, Timmer said, but he added it's still a coin toss based on economic data. "We're back into the same mode of how the numbers stack up."
Earnings growth that spurred the bull market has been battered in the global oil collapse. Prices had been gaining ground since their Feb. 11 bottom, but on Wednesday, West Texas Intermediate crude fell 4 percent.
"There's so much debt involved in putting all these drill rigs into the ground," Timmer said. "When oil went to $30, it causes a lot of pain in the credit market and in the stock market."