Billionaire investor Carl Icahn is "extremely cautious" on the U.S. market, he told CNBC's "Power Lunch" on Thursday.

"I do believe in general that there will be a day of reckoning unless we get fiscal stimulus," he said, pointing to the Federal Reserve's maintaining low interest rates, and potentially creating "tremendous bubbles."

On the fiscal side Icahn argued that "you certainly could do more spending."

"The Republican party that I used to be more sympathetic with — I'm right in the middle now, although as you know I'm for (GOP front-runner Donald) Trump — but what I would say is Congress is in this massive gridlock obsessed," he said, explaining that the Republican-controlled Congress is "obsessed with this deficit to a point that I think it's almost pathological."