Don't Worry! Fed QE No Big Concern: Blackstone CEO
The Federal Reserve's $3 trillion-plus balance sheet is not too big when compared with the entire banking system, Blackstone boss Steve Schwarzman told CNBC on Thursday. That's why he's not that concerned about the central bank's massive bond-buying program, he said.
"When the [financial] crisis started, the U.S. Fed was only about $800 billion," Schwarzman said in a "Squawk Box" interview. "Citibank was about four and a half times the size of our entire central bank. That seems a bit odd to me.
"The idea that the central bank is now at [about] $3 trillion and Citibank is down to around $2.4 trillion still doesn't seem like the central bank is massively scaled to the size of the U.S. banking system in toto," he added.
(Read More: Why Schwarzman Says China Is 'Core Curriculum')
As for the record-high stock market, Schwarzman said, "We've come a long way, and we've done it through modest economic growth in the U.S.—almost none in Europe—a decreased level abroad.
"The dominant factor is really record low rates virtually everywhere in the world," he said. Though Schwarzman acknowledging that rates will go higher, he didn't have a timetable.
With rates on 10-year Treasurys at around 1.8 percent because of the easy monetary policy, individual investors as well as big money managers looking for yield have been forced into stocks and other traditionally riskier investments.
This trend has created a "golden moment" for Blackstone, Schwarzman said.
With backing from the state of New Jersey and the California pension fund CalPERS, Blackstone last year created the $1.25 billion Tactical Opportunities Fund.
"That particular vehicle invests in all of the alternative asset classes," Schwarzman said. "That includes private equity, real estate, credit, hedge fund-oriented" investments.
The Tactical Opportunities Fund aimed for returns in the mid-teens and hit "sort of mid-20s," he said. "If you're going to make a 'mistake, that's the type you should be making."