The mix of fiscal, monetary and regulatory policy in the United States is likely producing misallocations of capital that may not trickle down, Jason Trennert, chief investment strategist at Strategas Research Partners, said Monday.
The combination of easy money and tight bank regulation in particular is discouraging companies from investing in capital formation that would benefit the economy, instead pumping up stock prices, he said.
"In my way of thinking, the policy has actually made it worse, made the income inequality worse," Trennert said on CNBC's "Squawk Box."
The Federal Reserve's benchmark interest rate remains near zero, which has sent investors flocking to riskier assets.
Trennert said he is worried because companies are now much more willing to take financial risk—such as issuing debt to buy back stock or acquire another company—rather than take economic risk. As a result, U.S. firms are holding back capital investment in things like new factories and equipment.
Washington is exacerbating the problem by failing to offer clarity on its plans for tax structure, he said.
"Capital spending in particular takes the most confidence. It takes a lot more confidence than share repurchases, because you're not going to get a return for four or five years," he said. "There's a very strong tendency to try to do things that are immediately accretive to earnings."
While such short-term decisions are good for the stock market, they are not good for overall economic activity, he added.
Trennert views private equity as one place where misallocations of capital could eventually create "pockets of trouble." He noted that there are now about 5,000 private equity firms managing about $3.5 trillion of unlevered money, compared with about 5,200 publicly traded stocks.
"You have a lot of things where people are reaching for yield. I don't think it's going to end well," he said. "I don't think it's going to be in a publicly traded space. I think it's going to be in another place that we're not looking at."
The Fed may wait longer than expected to raise interest rates if U.S. economic reports continue to come in weak, Jim O'Neill, former chairman of Goldman Sachs Asset Management, said on "Squawk Box."
A rate hike at the Fed's June meeting is off the table following disappointing factory orders and durable goods reports, he said. Those data show that the stronger dollar is starting to hurt U.S. companies, he added.
A stronger dollar makes U.S. goods more expensive abroad and dilutes profits when American companies repatriate overseas earnings. The euro has continued to weaken against the dollar as the European Central Bank buys billions of dollars of bonds in a bid to stimulate the continent's economy.
Should next month's data come in weak again, a September rate hike could also be in question, O'Neill said.
"I think the Fed, based on the way that they're approaching things, is going to want to see a lot more evidence that this is not some kind of new permanent weakness," he said.
The Fed has indicated it will raise rates when it believes the economy is healthy enough to handle higher interest rates.