Billionaire investor and Carlyle co-founder David Rubenstein says the US won't spiral into a recession and inflation will dip to as low as 4% in 2022

• Carlyle Group co-founder David Rubenstein said in a TV interview with CNBC that the US will not spiral into a recession.
• "I think the market correction will be modest, relative to what we've seen in the past when you have a gigantic correction," he said.
• The private equity billionaire also thinks inflation will soon dip to as low as 4% later in the year.

Carlyle Group co-founder David Rubenstein believes the US will not spiral into a recession despite economic growth hampered by the pandemic and adds that inflation will soon dip lower later in the year.

"I don't see any big, gigantic market correction of the type that's going to push us into a recession. I don't see that at all," Rubenstein told CNBC in a TV interview Tuesday. "I think the market correction will be modest, relative to what we've seen in the past when you have a gigantic correction."

The private equity billionaire was allaying concerns following the volatile start to the year when the tech-heavy Nasdaq Composite and the benchmark S&P 500 entered correction territory. US equities whiplashed after the Federal Reserve indicated hawkish signals on rate hike paths for the year.

The central bank is looking to rein in inflation that surged to its highest since June 1982. In the January consumer price index data due Thursday, economists polled by Bloomberg are expecting a 7.3% surge, continuing the trend of prices rising at the fastest pace in about 40 years.

This elevation is temporary, said Rubenstein, who predicted inflation will dip to as low as 4% to 5% this year.

He added the Fed will likely raise interest rates by 25 basis points in March though he does not think the central bank will hike rates in every meeting this year.

"I suspect anything less than 25 basis points, which is to say no rate increase, would be a big shock," he said. "Something more than 50 basis points would also be a big shock."

He also does not think the current economic environment is as bad as it was in the 1970s, even as wages continue to increase.

"When I was in government, we had a different situation," he told CNBC, referring to his time as a deputy assistant for domestic policy to President Jimmy Carter. "Inflation was double digits, [the] Fed funds rate went up to 20% ... We're not looking at anything like that."