Bank stocks are enjoying a nice tailwind right now, but there may be difficult times ahead for the sector, top investor Katie Nixon told CNBC on Friday.
That's when she'll be looking to trim some of her positions.
Nixon, who manages $234 billion in assets as chief investment officer for Northern Trust Wealth Management, told "Power Lunch" she'll make that call based on what the Federal Reserve does with interest rates.
The market is anticipating the central bank will move in December, but Nixon isn't in that camp. However, if the Fed does hike in December, the next increase won't be for a very long time, she said.
"So it's going to be a really … challenging environment for banks. And if the Fed does hike more aggressively than the market thinks, you're going to see the yield curve flatten out like a pancake, and again that's going to be very hard for banks," Nixon noted.