David Reilly, director of portfolio strategy at Rydex Investments, told CNBC’s “Power Lunch” that rising interest rates may take a bite out of equities in the short-term.
“Clearly, rising interest rates represent a potential threat to equities,” Reilly said Wednesday. “Obviously, we’ve seen a pullback in equity prices over the last few (trading) sessions. With the 10-year treasury at 5%, there’s clearly upward pressure on interest rates.”
But he said the market isn’t yet at the point where the cost of financing derails the liquidity-driven rally.
“One of the things that we think is important is you started to see some multiple expansion,” Reilly said.