Despite what some call its Reagan-esque economic policies, the incoming Donald Trump administration is inheriting an economic landscape that is very different from what President Ronald Reagan had when he took office, economist John Rutledge told CNBC on Wednesday.
"There are two differences, one is interest rates and the other's inflation," Rutledge, who was one of the chief architects of Reagan's economic plan, told "Squawk on the Street."
Rutledge, chief investment officer at Safanad, said that when Reagan came into office, inflation was in a downturn.
Today, "we've got eight years of monetary stimulus, an extraordinarily tight labor market, and margins that have been squeezed by rising labor costs and soft prices," all of which are reversing on improved expectations for growth, he said.
And in 2017, contrary to the Reagan era, inflation will be on the uptick, Rutledge said.
"We've got a year coming here where the labor price pressure is pushing though into product prices [and] inflation numbers are up. That's why you see the bond yields up, because inflation's coming around, which means I would prefer stocks that are protected from inflation and not the ones that will be hurt by inflation," he contended.
Rutledge's top asset pick is real estate — the opposite of what was recommended when Reagan was beginning his presidency, the economist said.