Bank of America strategists warn: Fed rate hikes run the risk of overvalued stocks

On February 8, a team of strategists led by Bank of America Savita Subramanian warned that some optimists expected the stock market to ride out the rate hike cycle as well as in the past, but they made a mistake on an important detail. While U.S. stocks have had positive returns during previous rate hikes, the main risk this time around is that the Fed "tightens policy at a time when markets are overvalued." "The S&P 500 prior to this first rate hike was more expensive than any other rate hike cycle except the 1999-2000 period."