The Federal Reserve should finish up its bond-buying program posthaste, says private equity heavyweight Barry Sternlicht, CEO of Starwood Capital Group.

"This baby has to stand on its own legs now," he tells CNBC, referring to the economy. "I think people were nervous with the [Fed] taper that rates would shoot up. Obviously they didn't."

The 10-year Treasury yield stood at 2.64 percent early Friday, down from 3.03 percent Dec. 31.

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"I look at the bond market as the purveyor of truth," Sternlicht states.

The Fed has trimmed its bond purchases by $10 billion a month at each of its last three policy meetings, leaving QE at $55 billion a month.

The reason why this tapering hasn't been accompanied by higher interest rates is because economic growth is "not that strong," he argues, predicting growth won't meet the 2.8 to 3 percent range forecast by the Fed for 2014.

GDP expanded 2.6 percent in the fourth quarter.

Meanwhile, stocks will have difficulty rising without faster economic growth, Sternlicht warns. He forecast a return of zero to 10 percent for stocks this year.

Some investors have maintained their optimism for stocks, despite the market's recent three-day decline. "I still think it's a buy-the-dips market," Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, tells Bloomberg.

"We're close to a near-term bottom, but we need a little more confidence from investors for the equity markets to trend higher."

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