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The Federal Reserve is unlikely to tackle hot inflation with a massive rate hike of 100 basis points at this week's policy meeting, as a hike that big would disturb investors and result in further worry about elevated consumer prices, Carlyle Group co-founder David Rubenstein told Fox Business. 

"The Fed has been telegraphing 75 basis points. If they were to go to 100 basis points, I think it would be shocking to the market," Rubenstein said in a televised interview on Monday. 

"I know some percentage of people in the market, 14% or so, think it might be 100 basis points, but I think they wouldn't want to shock the market that way. So if they were going to do 100 basis points, I think they would have telegraphed it by now," said Rubenstein, whose latest book "How to Invest: Masters on the Craft," was released last week. 

The Fed will begin meeting on Tuesday with a policy decision due Wednesday. It has hiked the fed funds rate four times in 2022 to a range of 2.25% to 2.5%, including two consecutive increases at three-quarters of a percentage point. 

"The Fed is likely to think if they were to do 100 basis points, the reaction would be that they know that inflation is much worse than people think it is. And therefore, I think it would probably depress the markets even more than they were depressed last week," he said. 

US stocks last week saw their worst week since June after inflation in August cooled by less than anticipated. The Nasdaq Composite dipped roughly 5.5% and the S&P 500 plunged by 4.1%.  The headline inflation rate of 8.3% missed expectations of 8.1%. Consumer price inflation has been lingering near a four-decade high. 

The Treasury market has also sunk into bear territory this year, with yields surging while bond prices plummeted. The Fed-policy sensitive 2-year Treasury note yield on Tuesday reached 3.97%, a fresh 15-year high. The 10-year Treasury yield soared to 3.56%, a fresh 11-year high. The yield curve inversion is widely considered a warning of economic recession.