Taper by 'Fat, Dumb and Happy' Fed Will Hurt: Strategist

The stock market could sink 10 to 15 percent as soon as the Fed tapers its massive bond buying, but the "fat, dumb and happy" central bank won't do that just yet, hedge fund strategist Michael Novogratz tells CNBC.

So the market could go up a lot between now and then, said Novogratz, a principal at Fortress Investment Group, the publicly traded hedge fund with $55 billion under management.

"As long as the inflation indicators keep pointing down, the Fed is sitting there with a cigar in their one hand and bourbon in their other," he said. The economy is also growing, so "it's a perfect storm" for the Fed, he said. "They'll talk about tapering, and they'd like to, but it's not in any rush."

Novogratz appeared on "Squawk Box" a day after hedge fund manager David Tepper told the program that investors shouldn't be concerned about the prospect of the Fed taking its foot off the gas. He said the stock market eventually needs a tapering so it doesn't go into hyperdrive.

Tepper also told CNBC he's "definitely bullish" on stocks, helping to send the Dow Jones Industrial Average higher for a record 18th-straight Tuesday. The S&P 500 Index also closed at an all-time high.

(Read More: It's a 'My Cousin Vinny' Market, Bullish Tepper Says)

"It's been a wall-of-worry market. People have not bought in yet. That's why the market doesn't go down," Novogratz said, adding that stocks are cheap. "If you look at the stock market today versus where it was in 2007, earnings are higher. There's no alternative investments."

"[But] once everyone buys in, and the Fed moves, then everyone will sell," he added.

A member of the Fortress board, Novogratz is also chief investment officer of the Fortress Macro Fund, which delivered a nearly 18 percent return after fees last year.

Earlier this month, Fortress reported better-than-expected first quarter earnings and revenues. Shares of the hedge fund company have gained about 65 percent this year.

"If you've been long [stocks] all the way and making lots of money," Novogratz continued, "it's probably a good time to take your chips off the table once the Fed starts moving."

But for now, he said that central banks around the world are flooding the markets with liquidity, and with inflation continuing to fall the Fed is feeling "fat, dumb and happy."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.