Fed should taper bond buying: Goldman Sachs

The Federal Reserve should taper its massive bond-buying program at this point, but it shouldn't be as big as deal as investors are making it out to be, Lloyd Blankfein, chairman and chief executive of Goldman Sachs, told CNBC on Wednesday.

If the Fed scales back its asset purchases by USD 10-billion-a-month the market will be "happy," anything more it will be "sad," Blankfein said on "Squawk Box" from Chicago, where the investment bank held an inaugural CFO conference that concluded last night. When Blankfein appeared on CNBC at in late June, he said the pullback in stocks at that time on the Federal Reserve taper talk was an overreaction. Also read: Blankfein: Market Overreacted to the Fed Since the June 24 bottom, the S&P 500 has risen about 7 percent and the Dow Jones Industrial Average has gained nearly 5 percent. Last week, Peter Oppenheimer, chief global equity strategist at Goldman, said equities have now entered a "growth" phase—the longer but more moderate stage of a bull market, when equities are driven more by earnings rather than valuations. Also read: Goldman Sachs: Reasons to stay bullish on stocks Back on March 21, 2012, Goldman said the prospects for making money in equities relative to bonds were as good as they had been for a generation. Since then, the Dow has gained about 17 percent and the S&P increased more than 20 percent. Also read: Debt ceiling, not tapering is the bigger market risk