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The reasonably healthy U.S. economy is doing little to assuage investor concerns about the stock market, and all the conflicting signs makes it feel like we're "standing in quicksand," Starwood Capital Group chief Barry Sternlicht said Tuesday.

"It feels like the market is telling you the party is over," Sternlicht told CNBC's "Squawk Box," citing concerns about low liquidity. "Everyone feels like we haven't seen what's around the corner, behind the curtain, and we're nervous."

The slowing Chinese economy has put a question mark on whether the rest of the world may also get dragged lower.

But for now, he said, "the facts look pretty good — the United States, in particular looks pretty good, England looks pretty good, [and] Eastern European countries ... look pretty good."

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"Housing sat out most of the recovery, but it's actually doing pretty well," said Sternlicht, whose $45 billion investment firm has a heavy emphasis in real estate.

He characterized rentals as "very strong;" hotels as showing "pretty good numbers" from the low end to the high end; and malls as OK.

"The biggest issues in the housing market are jobs. They can't find the workers" because of the low labor-participation rate at a time of nearly full employment, he said. "It's not demand."

Warning about signs of wage inflation, he said, "when it's there it will be too late."

That's partly the reason he wants the Federal Reserve to increase interest rates. "We don't need these rates. The economy doesn't need these rates," he said, arguing the hike should have happened two years ago.

Echoing comments from former Fed Chairman Ben Bernanke on "Squawk Box" on Monday, Sternlicht called for more leadership and policy action from government agencies outside the central bank to help support growth.

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Sternlicht expressed concern that the leading candidates on the Republican side — Donald Trump, Ben Carson, and Carly Fiorina — are not career politicians, which could create uncertainty about how they'd handle the gridlock in Washington.