(Bloomberg) -- Bank of America Corp.’s Savita Subramanian says a sturdy economy will sustain the bull-market run in US stocks even without Federal Reserve interest-rate cuts. 

The bank’s head of US equity and quantitative strategy is optimistic that the economy will avoid a severe downturn. The biggest challenge, however, will be if growth slows while inflation remains elevated, she said.

“I think we’re going to a soft landing, with a reasonable market environment, maybe better growth ahead than what we’re used to, higher rates and a little bit higher inflation,” Subramanian said Thursday on Bloomberg Television. 

She said she sees the Fed trimming interest rates as early as December, or possibly not at all this year. Fed Chair Jerome Powell on Wednesday underscored policymakers’ intent to keep rates higher for longer in the face of sticky inflation. Traders currently see the central bank waiting until the fourth quarter to reduce borrowing costs.

Subramanian reaffirmed her year-end target of 5,400 on the S&P 500 Index in 2024, implying a gain of about 8% from Wednesday’s close. That call ranks as one of the most bullish on Wall Street, based on the roughly two dozen sell-side strategists tracked by Bloomberg. The S&P 500 is trading a bit below the average year-end forecast of 5,069.82.

The S&P 500 just snapped a stretch of five straight months of gains — a streak it’s only accomplished one other time this century, in 2013. April’s loss trimmed the index’s 2024 gains to about 5% through Wednesday, after it rose 24% in 2023. 

First-quarter earnings season has reaffirmed that corporate profits are improving. Out of the roughly 70% of the benchmark’s market capitalization that has reported, 79% have beaten expectations, according to data compiled by Bloomberg Intelligence. 

Of note, Bank of America’s Sell Side Indicator, which tracks the average recommended allocation to stocks by US sell-side strategists, appears to be sending a contrarian signal after last month’s slide in the S&P 500. The dive drove the strategists out of equities and bonds and into cash, a possible contrarian sentiment barometer that’s getting closer to indicating it’s time to buy US equities.

Last week, at least, Bank of America clients were doing just that. They posted their largest inflows to US equities in eight weeks during the five-day period ended Friday as the S&P 500 rallied.

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