×

Fed rate hike won't stop bull market run: Expert

The prospect of rising interest rates is spooking investors, but even a Federal Reserve hike will not stop bull market momentum, one expert said Monday.

The three major U.S. averages closed about 1 percent lower Monday after posting six straight weeks of gains. Strong October jobs gains announced Friday stoked expectations that the U.S. central bank could lift its short-term interest rate target next month.

"With the Fed getting poised to raise rates, it makes sense for markets to get a little more volatile," said David Donabedian, chief investment officer at Atlantic Trust, in a CNBC "Power Lunch" interview.

Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.

He expects "three or four small rate hikes" by the end of next year, bringing the federal funds rate from near zero to between 1 and 1.25 percent. As the rate would still fall below historical trends, it is "not the stuff that's going to kill an equity bull market."

Read MoreFed rate hike 'makes sense,' says US central banker Williams

Monday's selling is not alarming, as the market "looked overbought by any measure" after the weeks-long winning streak, added Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"We're not put off, necessarily, by this pullback. In fact, we wouldn't be surprised if it ran a little bit deeper before it was all said and done," he said Monday on "Power Lunch."