If there's a "magic formula" for the U.S. stock market, it would be China heavily easing its "much too tight" monetary policy, hedge fund billionaire David Tepper said Friday.
"If there was going to be a paradigm, it would be China really easing; not one quarter, but they could lower a couple hundred basis points," said Tepper, founder and president of Appaloosa Management, which has more than $20 billion in assets under management.
Last week, China's central bank cut interest rates for the sixth time since November, and the European Central Bank signaled it would consider extending its massive bond-buying program well into 2016 and even beyond.
"People might underestimate if [China] straightens itself out ... how fast the Fed might have to raise rates. It might be another paradigm," Tepper told CNBC's "Squawk Box" in an interview from Carnegie Mellon University, where a groundbreaking on the Tepper Quadrangle was set for Friday.