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Gabelli: Fed rate hike is long overdue

Billionaire value investor Mario Gabelli said Thursday the Federal Reserve should raise interest rates.

"It's long overdue," GAMCO Investors' chairman and CEO told CNBC's "Fast Money: Halftime Report," adding that the markets will be able to handle higher rates.

"The rates are going up, and the market's adjusting to it," he said. "Will it help the market if it's quick? ... It might, but I think it's been discounted, particularly on the 10-year. We think the market's already priced in a 3 percent rate increase on the 10-year."

The odds of a Fed rate hike taking place next month rose sharply after the October nonfarm payrolls report showed the U.S. economy added 271,000 jobs.

Gabelli made his remarks as investors digested a slew of speeches from Fed officials.

He also said he added to his Macy's position on Wednesday, as the company's stock tanked on mixed earnings and weak guidance.

"We thought the decline was overdone," he said. "But there are changes in the way people buy clothes. When I was growing up, if I needed a tuxedo, I'd rent it ... but this is also seasonal and cyclical."

Shares of Macy's gained about percent in early afternoon trading a day after posting their worst trading day since 2008.