Cooperman: The market is ready for a rate hike

The Federal Reserve has maintained crisis-era policy for too long, and stock markets can handle interest rate normalization, widely followed hedge fund manager Leon Cooperman contended Wednesday.

"There's no crisis ... the time has come to normalize policy. I think it would be more negative if they don't raise than if they do raise," he said on CNBC's "Fast Money: Halftime Report."

The Omega Advisors CEO's comments came ahead of the Fed's decision on whether to abandon its near-zero interest rate policy. The central bank's policymaking committee is widely expected to vote to hike rates Wednesday afternoon for the first time in nearly a decade.

Leon Cooperman
Adam Jeffery | CNBC
Leon Cooperman

Cooperman argued that markets are ready for policy normalization. The fate of stocks next year depends on whether the U.S. economy faces a recession more than Fed policy, he said.

"If we avoid recession, I think the average common stock will do better and catch up to what the leading stocks are doing," Cooperman said.

He also contended that the central bank's policy has punished savers, who would benefit from rates inching up.

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Cooperman admitted that he has endured a "bad year" along with other noted hedge fund managers like Bill Ackman and David Einhorn. The market has been "bifurcated," favoring high-growth technology names and dragging on more diverse portfolios, Cooperman contended.

U.S. crude oil prices — which have plunged about 40 percent this year — have also generated some recent market fears. Lower oil prices should prove "unequivocally" positive for consumers, but they will likely rise in the next year, he argued.

Cooperman added that yields on junk bonds look appealing despite recent concerns about high-yield assets.