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When it comes to the 'tortoise' economy, slow and steady wins the race, advisors say

  • Economic growth has been at 2 percent for the past 8 years, which two advisors say has led to a smooth economic recovery.
  • President Trump wants to see 3-4 percent growth, which could cause inflation and a halt to this recovery.
  • Fed chair Janet Yellen says the Trump administration's goal is "challenging."

At the end of the day, slow and steady economic recovery wins the race, according to two financial advisors.

U.S. economic growth has been stuck in a 2 percent rut over the last 8 years of expansion, but Burns McKinney, CFA and portfolio manager at Allianz Global Investors, is concentrating more on the expansion than the rut.

"Two percent doesn't sound fantastic," McKinney said on CNBC's "Power Lunch." "But it's been just enough to grow jobs, to bring the unemployment rate down. Wage growth has been respectable enough to drive consumer spending but yet not so strong that it has crimped corporate profits, which is what's really allowed this economic recovery to go on so smoothly."

As long as interest rates and inflation stay low, 2 percent growth will allow the economy to "stay on its two feet," added Paul Christopher, head global market strategist at Wells Fargo.

President Trump has said he wants to see 3 to 4 percent growth in the future, but both advisors warned that a faster growth rate could spark inflation and halt this economic recovery.

Inflation would occur because of excessive borrowing, Christopher explained. In contrast, while under this current slow rate of growth, consumers aren't interested in splurging on debt. Christopher said he could see the economy expanding beyond 2018 if the tortoise economy continues.

There will be a recession in the next 2 to 3 years, said Christopher, but while it's not imminent, investors should focus on the markets and stay fully invested.

Fed chair Janet Yellen also sees the Trump administration's 3 percent GDP goal as "challenging." She said Trump's policy overhauls could have a positive impact on the economy if done properly.

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