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Strategist Bob Doll: Fed is ‘held hostage’ by global markets

Bob Doll: US10yr hit low at 1.37%

Market expert Bob Doll believes we are currently in a "multiyear bottoming process for rates," thanks to global market volatility as U.S. markets come out of a relatively stagnant quarter despite shortcomings in the financial sector.

The senior portfolio manager and chief equity strategist of Nuveen Asset Management told CNBC's "Squawk Box" that deflation in Japan and parts of Europe is one reason the Federal Reserve remains hesitant to raise interest rates.

The worry stems from the possibility, Doll said, that a rate hike will trigger a dollar rally and commodity sell-off, causing market instability that could reverberate worldwide.

"We're held hostage, but only to a slight degree," Doll said.

Still, Doll contended, the Fed will "gingerly move forward" while keeping an eye on the variables that could cause any major waves.

One of the most important factors for overall growth, Doll said, is maintaining global trade, because growth enables investors to "own cheaper, more cyclically oriented" stocks.

"I think the valuation rubber band has been stretched very significantly," the strategist said, suggesting that if the United States can't maintain growth, it won't be long until it snaps.

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