Despite the fears about President Donald Trump's recent protectionist moves, the U.S. stock market appears to be focusing on the positive at the moment, trader Jeff Kilburg told CNBC on Wednesday.
"Right now the market is discounting any rhetoric that comes out of the Trump administration," the founder and CEO of KKM Financial said in an interview with "Closing Bell."
"They're counting on the fact that tax reform, infrastructure spending will trump, if you will, the market."
While investors are embracing the promise of tax cuts, fiscal stimulus and deregulation, they are also wary about the populist tone the president has struck.
On Wednesday, Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, said he is increasingly concerned about the Trump administration's "populist" policies that could hurt the world economy.
Trump on Friday put a four-month hold on allowing refugees into the United States and temporarily barred travelers from Syria and six other Muslim-majority countries.
Brian Nick, chief investment strategist at TIAA Global Asset Management, told "Closing Bell" the U.S. hasn't had to deal with some of the policy issues other countries have faced — until now.
"We've kind of been on this island, where it's been gridlock, for better or worse, there hasn't been a whole lot on the policy front to affect markets and that's clearly changing," he said.
Right now, he's still biased toward sectors that will benefit from Trump's pro-growth initiatives, like consumer discretionary and technology.
However, "if you end up with a more protectionist policy coming out of the administration, those are precisely the sectors that would do the worst," Nick noted.
In December, it indicated three more rate hikes were on the way in 2017. Market expectations are for a somewhat less aggressive Fed, with just two hikes, in June and December, currently priced in.
Kilburg called the current situation "a little bit of a limbo purgatory," noting many investors are even talking about just one rate hike this year.
However, Diane Swonk, founder and CEO of DS Economics, thinks the Fed will hike "at least" three times this year. In fact, she's concerned they might have to hike more than that.
"Even small rate changes from these low levels are very destabilizing on financial markets abroad as well as at home," she said. "They want to go gradual and be orderly, not disorderly."
Right now, Swonk thinks the central bank is "walking on eggshells" as Yellen faces a president who campaigned against her and an upcoming Senate briefing in February.
"They can only react. There is so much uncertainty," she said. "We don't know what's going to happen next, and because of that the Fed has to be in reaction mode and not getting too far ahead of itself on rate hikes."
— CNBC's Jeff Cox and Reuters contributed to this report.