The U.S. stock market will disappoint investors as long as the U.S. Federal Reserve Board remains determined to raise rates, says BCA Research.

In a research note issued today, the independent research firm predicts, “The U.S. equity market is destined for a period of disappointment, if the Fed does not back off until the economy has decisively downshifted to sub-potential growth.”

“U.S. large-cap stocks have struggled of late, held back by concerns that the Fed might keep tightening,” BCA Research notes. The firm points out that the Fed has confirmed its policy stance was unchanged in the latest FOMC meeting.

BCA reports that the S&P 500 index is priced for a 12% rise in operating earnings in the next year, which is “considerably stronger” than the firm’s model is predicting.

“The S&P 500 has been range-bound in the past year and appears likely to continue churning in the coming months, albeit with a downward bias: the Fed seems likely to continue on its (relatively) hawkish path until the economy cools for more than a month or two,” the research firm concludes.