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Blankfein: Fed 'wise and courageous'

Goldman Sachs Chairman and CEO Lloyd Blankfein said that the Federal Reserve has been "wise and courageous" in its policy.

Speaking with CNBC on Thursday, Blankfein explained that he thinks the Fed's cautious strategy has proven to be the right one.

"They've handled it right—they've handled it in a cautious ways, and I think in some ways have been courageous because if everything goes well it will turn out that they didn't need to be this low for so long because it's like an insurance premium that they're paying," Blankfein said.

Goldman Sachs CEO Lloyd Blankfein speaks during the Clinton Global Initiative in New York.
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Goldman Sachs CEO Lloyd Blankfein speaks during the Clinton Global Initiative in New York.

He also cautioned that the risks of the Fed being too hawkish could be severe.

"The consequences of slipping into deflation are very very extreme because what tools do we have to reverse that?" Blankfein said. "Better to play it on the safe side and keep rates lower."

The bank reported a huge third quarter on Thursday morning, easily beating analyst estimates on a revenue bump from bond trading. Goldman also cited an improving U.S. economic environment for its own recent successes.

Read More Goldman's big Q3 beat

Turning to the recent market volatility, which some have blamed on the threat of Ebola in the United States, Blankfein cautioned that investors not succumb to fear.

"I don't think we should be hyperbolic and crazy about this," the CEO said, adding that "I wouldn't overdo the Ebola virus and I wouldn't try to create another virus of fear that has its own life to it."