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Rate hike? So what. Bull won't stop: Ed Yardeni

As August winds down and summer vacations come to an end, Wall Street is ripe with anticipation on whether Fed Chair Janet Yellen will stick to her guns and raise interest rates in September or push it back to December. And as the unknown rattles many investors, market bull Ed Yardeni insists stocks and bonds will be just fine.

"Given that [a rate hike] has been so widely expected, the reaction should be minimal," the president of Yardeni Research said Tuesday on CNBC's "Futures Now."

According to Yardeni, the global economy is in a period of "secular stagnation," which creates a positive environment for 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."

Read MoreDon't expect Fed to signal rate hike: Strategist

And as external factors like China and Greece have weighed on sentiment this year, Yardeni said it's nothing new. "These have been worries all along in the bull market. The only serious problem we have with the market is valuation. Stocks are not cheap."

The S&P 500 has rallied nearly 27 percent in the past two years and is trading around 17 times forward earnings. Despite being expensive, Yardeni believes the market will "continue to move higher" following the September FOMC meeting.

"It's either going to be a one and done or a none and done," he said. "I see the S&P 500 ending this year at 2,150 and next year at 2,300." On Wednesday morning, it was around 2,081.

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