The U.S. economic environment is " very good" and the stock market's rally to multi-year highs has more room to go, saidGoldman Sachs  Chairman and CEO Lloyd Blankfein in a CNBC interview on Friday from the World Economic Forum in Davos, Switzerland.

(Read More:  Davos 2013 Special Report)

" The market has gone up with people being under-invested," Blankfein told " Squawk Box," adding that investors should want the market to go down " so they can get in."

He said that people have reason to be optimistic. " In a lot of ways, the worst case scenario [in Europe] is taken off the table … There is a lot of relief that the Euro isn't going to collapse."

" [But The place that is in a much better position right now is the United States."

As for how long interest rates will remain low in the U.S., Blankfein said, " The turn in interest rates … it won't necessarily happen when the Fed changes interest rate policy. It'll be when the market decides the Fed will have to change interest rate policy."

He added that could happen sooner than the official shift by the central bank.

US Environment Is 'Very Good’ and the Stock Market Has Rallied to Multi-Year Highs With ‘People Under-Invested:' Goldman CEO Blankfein