The market 'got ahead of itself' in expecting interest-rate cuts, according to a BlackRock strategist who warned the Fed would 'stay hawkish'

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BlackRock's Ben Powell told Bloomberg markets were too confident that interest rates would come down faster than planned, making stocks overvalued.

The sun rises to the east of the U.S. Federal Reserve building in Washington, July 31, 2013.A BlackRock strategist said the markets were too confident the Fed would rein in interest rates.But BlackRock's Ben Powell told Bloomberg the Fed would likely"stay hawkish" on rates.

As the impact of last year's rates rises filter into the economy, the Fed is now facing calls to rein in or even reverse its hawkish stance on monetary policy. But Powell said that recent data – suggesting that inflation was slowing — wasn't likely to soften Fed chair Jerome Powell's stance ahead of this week's Federal Open Market Committee Meeting, where rates are expected to rise by 25 basis points.

"We think the market's got ahead of itself, at least in the West. We would therefore be a little bit cautious," he told Bloomberg Monday morning.

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