While there may be a shorter-term spike in inflation thanks to the government's stimulus measures and record-low interest rates, investors shouldn't break the bellbottom pants out of the closet just yet.
Federal Reserve Chairman Jerome Powell said Tuesday that the U.S. central bank "will continue to provide the economy the support it needs for as long as it takes" since recovery is "far from complete."
Treasury Secretary Janey Yellen, meanwhile, said the passage of President Joe Biden's $1.9 trillion relief plan will help people "reach the other side of this pandemic with the foundations of their lives intact.
Following their first day of testimony to Congress, Brian Vendig, President of MJP Wealth Advisors, told TheStreet's Corey Goldman that monetary and fiscal policy "dynamic duo" is focused on letting the economy grow to its full potential.
"In light of everything going on, this dynamic duo has a lot of responsibility in giving us an understanding of how resources and assets are going to be allocated for the economy as well as to households and individuals," Vendig said. "I think investors are curious about the timing of deploying those resources."
Vendig noted that while Powell has made clear that there could be pockets of inflation as the economy returns to normal, that productivity is still high - meaning inflation won't spiral out of control.
"I think we can keep the bellbottoms in the closet. We're not going to go back to the inflation of the 1970s," Vendig said.
Watch the video above to hear more about Vendig's views on the economy and interest rates, and how he is positioning his clients' portfolios. Watch the video below to get Jim Cramer's take.