RBC Says Stocks Can Weather Fed Hikes, But Not Too Many

RBC Capital Markets stated that strong US corporate earnings are currently supporting stock prices despite concerns about potential Federal Reserve interest rate increases. Lori Calvasina, head of US equity strategy research at RBC, indicated on Bloomberg Television that while the market can absorb some rate hikes, there is a limit to the number of increases it can tolerate. The resilience of corporate profits is a key factor preventing a significant market downturn, according to Calvasina. However, she cautioned that an excessive number of rate hikes could still pose a substantial risk to stock valuations. The exact threshold for market tolerance was not specified, but the sentiment suggests a delicate balance between corporate financial health and monetary policy tightening.