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THIS could make correction more serious: Koesterich

In a sharp reversal, the U.S. stock market jumped higher Wednesday after six consecutive days of declines.

While fears over global growth contributed to the recent market rout, BlackRock's Russ Koesterich told CNBC's "Power Lunch" before the market close that he believed the ultimate fate of the market will depend upon what happens with the U.S. economy and the Federal Reserve.

"Most of the numbers we look at are not signaling another recession. This looks very different than 2008, and if the economy remains sound and the Fed holds off a bit, then there is a better chance that this will be a correction rather than a start of something more serious," BlackRock's global chief investment strategist said.

The major averages closed about 4 percent higher Wednesday, with the S&P 500 coming out of correction territory.

Investors have anxiously waiting for a signal from the Fed as to when it will begin to raise interest rates. Some still believe it could occur as early as September.

To be clear, Koesterich doesn't believe a rate hike would derail or slow the economic recovery because the central bank will not raise rates aggressively.

"I don't believe that a quarter-point hike in the context of the best labor market we've seen in 15 years is going to derail the recovery. It's a subpar recovery but it's strong enough to withstand an initial rate hike."

However, market reaction is a different story, he said.

"One of the dangers, and this is something to watch, is market reactions have typically been more violent when the Fed is hiking and inflation expectations are falling, which means that real rates are rising even faster," Koesterich said.

In the meantime, he believes it's important to watch mutual fund inflows and credit market spreads as market indicators. Over the past couple of days, many mutual fund advisors have told him that their clients want to buy the dip.

Bear market regime?

Meanwhile, Mike Vogelzang, president and chief investment officer at Boston Advisors, expects investor behavior to become more associated with a bear market.

"We think this next period of time—three, six, nine months or so—will probably be a period where people pay more attention to quality, to valuation, to sort of the more conservative types of investments that the stock market has," he told "Power Lunch."

While he wouldn't predict whether the market will end the year higher or lower, he said if central bankers around the world or the Federal Reserve "do some things that surprise the market in a negative way," the correction could get easily out of hand.

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