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Dealmaking is only in the 5th inning: Schwarzman

Pulse of M&A on the Street: Blackstone CEO

Dealmaking is not nearly at a high yet, and the mergers and acquisitions cycle is likely only in the fifth inning, Blackstone Group chief Steve Schwarzman told CNBC on Wednesday,

The reason? The economy is starting to do much better, and companies have $2 trillion in cash on hand, Schwarzman said in a "Squawk Box" interview from the Business Roundtable summit. Companies are now in the phase of the M&A cycle in which they are buying similar kinds of businesses that allow them to take costs out and get positive synergies, he added.

Asked what roll the current low-interest-rate environment will play in dealmaking, Schwarzman said the Federal Reserve's approach to raising rates is a little overrated in terms of its impact.

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"I think they're going to be quite cautious. They've worked since the crisis to make sure the U.S. has got positive momentum economically, and they're not going to stop that voluntarily, I don't think, for some period of time," he said.

A gradual interest rate increase of 50 to 100 basis points will certainly make news, he said, but it will not make a material difference to the U.S. economy.

"Markets will respond on an interim basis, but fundamentally the economy will grow through that. I don't think the Fed will throw us into a next recession," he said.

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