Not expecting the Fed's rate hiking cycle to derail the broader earnings narrative: Mona Mahajan

• The Fed's recent rate hike was a unified move to establish credibility in fighting inflation, leading to an immediate rollover in inflation expectations.
• The current rate hiking cycle is seen as a 'mid-cycle adjustment' with potentially 2-3 more hikes, which the economy is expected to handle without derailing broader economic or earnings narratives.
• S&P 500 earnings growth is projected at 30% this year, primarily driven by tech and related sectors, with a more modest and balanced 15% growth expected next year.
• Treasury yields have risen due to solid economic growth and inflation uncertainty, but core inflation remains contained, and a wage-price spiral has been avoided, which is crucial for the Fed.

Mona Mahajan of Edward Jones discusses the Fed's recent quarter-point rate hike, viewing it as a mid-cycle adjustment rather than a full hiking cycle. She believes the economy can handle further modest rate increases, citing healthy GDP and labor market projections. While acknowledging a K-shaped economy and bifurcated earnings growth, she remains optimistic about the stock market's potential for continued returns.