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Steve Blitz: Fed not the main driver for market selloff

The Fed's decision on monetary policy was far from the main reason U.S. equities sank Friday, ITG Investment Research's Steve Blitz said Monday.

"The big issue has been a global slowdown in earnings. When you look at the valuation of the equity market, it's very high relative to profits," the firm's chief economist said in a CNBC "Squawk Box" interview. "I think that the narrative that what the Fed did or didn't do on Thursday was the reason the equity market selloff is a bit of a false narrative."

The U.S. central bank decided Thursday to keep its main interest rate near zero percent, citing recent volatility in global financial markets as a reason to hold off on hiking rates.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Fed said in its announcement.

Read More I would have dissented on rate hold: Fed's Bullard

The major U.S. indexes are near the flat line for the month and have fallen more than 5 percent in the last three months.

"[Fed Chair] Janet Yellen basically told [the markets] what everybody knew and there isn't a fix for the central bank to do against that. All they can do is what they did," Blitz said.

Federal Reserve Chair Janet Yellen holds a news conference following the Federal Open Market Committee meeting in Washington September 17, 2015.
Jonathan Ernst | Reuters
Federal Reserve Chair Janet Yellen holds a news conference following the Federal Open Market Committee meeting in Washington September 17, 2015.

There is also another reason for concern, Southwest Securities managing director Mark Grant said on "Squawk Box."

"For the whole year, we've gone nowhere," Grant said, adding that the Dow Jones industrial average is down 8.07 percent in 2015.

The S&P 500 is down 4.9 percent this year, while the Nasdaq composite is 1.93 percent.

Read MoreFed puts bite back in FANG stocks: Technician

Grant added that another round of quantitative easing by the Fed might not help financial markets this time.

"In America, when we had quantitative easing, the equity markets went up," he said, also pointing out that European equities have lost about $600 billion of their value since the European Central Bank began its QE program.

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