When the Federal Reserve finally decides to normalize monetary policy, the timing and scale of interest rate increases should not hurt the stock market anytime soon, said a member of the board of directors at the New York Fed.
Any moves by the central bank are likely to be "later and smaller," added Glenn Hutchins, also a co-founder of private equity powerhouse Silver Lake Partners.
"If you look at historic data, it takes about a 5 percent, 10-year rate to begin to have a negative influence on equity prices," Hutchins told CNBC's "Squawk Box" on Tuesday. "We're a long way from there," he added, even though the 10-year Treasury yield has been moving higher since the beginning of the year, trading around 2.4 percent early Tuesday.
As of Monday's close, the was 0.6 percent from a record high—up more than 3 percent this year. The Nasdaq closed at a 15-year record high—adding to its nearly 9 percent gain in 2015.
"Equity prices are high for two reasons. The return from alternatives and fixed income is very low, and corporate performance has been good," said Hutchins, chairman of North Island, the holding company for his personal investments.
"Economic performance is likely to continue to be muted because of weak labor markets," he said, and that should keep a lid on any Fed rate increases.
The debate on Wall Street focuses on whether the central bank will hike rates for the first time in nine years at its September or December meeting.
Fed Governor Jerome Powell, a voting member on the policy-setting committee, said Tuesday he sees conditions for a rate increase as soon as September, and an additional increase in December.