Got Rate Hike Fever? Relax, Says Yardeni

Will the Federal Reserve raised interest rates in September? That’s a question that many investors have been fixating on. But top strategist Ed Yardeni says that a rate hike really isn’t that big of a deal.

“Given that [a rate hike] has been so widely expected, the reaction should be minimal,” Yardeni tells CNBC. He thinks the market will continue to rise after the Federal Reserve’s September meeting, and expects the S&P 500 will end this year around 2,150 and next year around 2,300.

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Yardeni  says we are in a global period of “secular stagnation,” which helps both the equity and fixed-income markets. “For the stock market and bond market, secular stagnation on a global basis means we have something in between,” he said. “We don’t really have inflation, we don’t really have deflation and central banks continue to maintain relatively easy money.”

While many investors have been worried about the debt crisis in Greece and China’s downturn, Yardeni doesn’t seem too concerned about those issues. “These have been worries all along in the bull market,” he said. “The only serious problem we have with the market is valuation. Stocks are not cheap.” He also says that, while he expects a period of global stagnation, he sees better things for the US, which he said looks good compared to a myriad of other “bland” economies.