The Fed's interest rate hikes this year are "not sustainable," Starwood Capital CEO Barry Sternlicht told CNBC this week, saying the series of increases are "self-inflicted suicide."

"This is a terrible idea, and it's not necessary. The economy is slowing on its own," Sternlicht told CNBC's Squawk Box on Thursday. He said that the impact of the rate increases will be felt in 2023 as companies pull back budgets, which will weigh on stocks. He also discussed the pullback of capital from investments in new infrastructure and equipments.

That "will slow the economy, it cannot do anything other than that," he told CNBC.

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