Minutes from the March meeting of the Fed's policymaking committee showed the members debated an April rate hike but concluded overseas pressure warranted caution.
In a more positive and equally likely scenario, Paulsen sees global growth picking up, allowing the Fed to raise rates into economic strength. Under those conditions, stock markets could rise.
Paulsen said already he sees signs that this is happening.
"If you look at economic surprise indices, they're rising in the last few months almost everywhere except Japan," he said. "Euro zone, the emerging markets, China, Great Britain, here, Canada."
On Thursday, Fed Chair Janet Yellen touted the strength of the U.S. economy and said she sees "substantial" progress toward the central bank's labor market goals and 2 percent inflation target.
The Fed has recently indicated that it plans two interest rate hikes this year, half its projection in December, when it raised rates for the first time in more than nine years. In cutting their expectations for the number of rate increases, policymakers cited concerns about weakness abroad.