Stocks shouldn't have a problem with rising interest rates so long as inflation remains in check, according to legendary investor Bill Miller.
"What higher rates are signaling is faster economic growth," Miller, the founder of Miller Value Partners, told CNBC's "Power Lunch" on Friday. "As long as inflation stays low, that's going to be good for stocks."
Stocks were under pressure this week as continuously strong economic data raised worries of rising inflation. Those concerns sent the 10-year U.S. note yield to its highest level in four years. The yield traded at 2.85 percent.
Despite all of this, Miller said rising interest rates could end up being a tailwind for stocks. "The last precedent we had for this kind of move in rates was in 2013 during the so-called Taper Tantrum, when rates went from 1.66 percent to 3.25 percent in four months," Miller said.
"That was the only year when money went into U.S. equity funds since the financial crisis," he added. "The stock market went up 30 percent that year." Miller also said that, as people start to lose money in bonds, more money would be shifted to stocks.
Miller is considered one of the best investors ever, after beating the market for 15 years in a row while working at Legg Mason.