In the short term, all looks well, Reich said Wednesday. But in several months, markets will not look as sunny as they do now as Trump continues to implement his policies, Reich, who served in the Labor post under former President Bill Clinton, told "Squawk Alley."
"Donald Trump is treating the world economy as a zero-sum game, the assumption being 'make America first, we win or they win,'" Reich said. "He's talking down NATO, the European community. He's making it seem as if trade is really bad for the United States and therefore we are going to put up trade barriers."
"This is not the kind of talk that will inspire confidence in global markets," said Reich, a professor of public policy at the University of California, Berkeley. "And so I don't think this so-called rally, this Trump rally, is going to continue much longer."
But not all of Trump's economic policies will be detrimental, Reich contended. The president's vow to boost infrastructure spending and create jobs by repairing and building numerous public projects should be beneficial to the American worker, Reich said.
"I think a big infrastructure program not only is good for the economy and good for America in terms of all of the deferred maintenance on so many of our roads and bridges and tunnels and also public transit, but also would generate a lot of jobs and have a big multiplier effect," Reich said.
But Trump and his administration's lack of interest in improving wages could dampen the success of growing the number of jobs, Reich contended.
"President Trump doesn't want to raise the minimum wage. He doesn't want to continue with President Obama's order with regard to ... the overtime threshold that the Labor Department has. He is anti-labor unions. Andrew Puzder ... is very anti-all of worker legislation of a lot of unions," Reich said.
"I don't think anything that Donald Trump is contemplating is going to improve wages," he added.