Conventional wisdom says that right now may not be the best time to invest in the stock market.
With many Americans waiting for the next shoe to drop when it comes to inflation and a possible recession, investing in equities after a 9.3% year-to-date rise in the S&P 500 sounds like a risky bet.
DON'T MISS: Powell Testimony: Inflation Fight Has 'Long Way to Go,' More Rate Hikes Needed
But at least one Bank of America analyst says that she is more bullish on the current state of the market than she has been in the last ten years.
"I think the market is more rational than it's been in a decade. Which is great news because we're finally done with this experiment of zero interest rates. We know what the Fed is gonna do, we are off the zero bound," BofA analyst Savita Subramanian told CNBC.
"I think that we're at a place where visibility and transparency is better than it was over the past 10 years."
While these are all bullish signs for investors, Subramanian also admits that investors can probably expect lower returns over the next 10 years than they've enjoyed over the previous 10.
"But I think that they're [the returns] driven by the right stuff, productivity and efficiency, companies are doing the right things right now and I think it's interesting to see corporate America adapt to this weird world that we've lived through. We've got a lot more rational of a market setup today," Subramanian said.
That's not to say that there aren't still irrational sectors of the market -- she specifically calls out AI -- but overall her view is positive.
Check out the entire interview below.
On Wednesday, Federal Reserve Chairman Jerome Powell told lawmakers that the central bank plans to continue raising interest rates to combat inflation as the fight to tamp down the dollar's falling value has a "long way to go."
"My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal," Powell said.
"Price stability is the responsibility of the Federal Reserve, and without it, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all."
Interest rates near zero spurred an unprecedented era of growth for the stock market which reached never-before-seen heights and has spawned multiple trillion dollar companies for the first time in history.
However, now that rates are being raised, the cost of borrowing is going up, and Americans may not be so keen to play in the stock market going forward.
Subramanian sees this as a positive because rationality is expected to return to the market.
