Power Play: Why U.S. stocks will be fine even with a rate hike

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters

Market volatility has been theme so far this year, with stocks moving up one day and down the next, all because of concerns over when the Fed will raise interest rates.

But Krishna Memani, chief investment officer and head of fixed income at Oppenheimer Funds, tells CNBC's "Power Lunch" on Monday a rate hike is not bad news for stocks.

The "Fed will probably raise rates at some point this year; however, we expect the pace to be glacial at best. Short rates will rise for sure in that situation but longer rates will barely budge. U.S. equities probably end up doing OK," Memani said.

Read More Rate hike needed to pop bubbles: Robert Shiller

He also sees the dollar turning higher in the second-half. "As the U.S. economic growth rate recovers, [the] dollar should re-strengthen versus other currencies. Effectively we are revisiting the same trades we were thinking of at the beginning of the year. That back and forth probably continues as long as the Fed remains in play," Memani said.

The dollar index is trading up after falling more than one percent during the last two months.