It's time for a dose of free-market medicine in which interest rates return to the historically normal levels that existed before the Federal Reserve started its ultra-loose economic policies, says Wells Fargo Chairman and CEO John Stumpf.

Stumpf explained that the U.S. financial system is more resilient than many observers would expect.

"We went through a tough deal in the last five years. It affected the psyche of consumers. [But] the real economy is stronger than the numbers show," he told CNBC.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

On Wednesday, Federal Reserve Chairman Ben Bernanke said the central bank could start to reduce or taper its $85 billion monthly bond-buying program later this year.

"I'm not a big fan of this much accommodation this late in the game, because I think the benefits from it [are] not there," Stumpf said. "It also helps mask things that should be happening on the fiscal side."

Stump said the White House and Congress need to come to an agreement on taxes and the deficit.

"Tax policy in the U.S. at minimum should be neutral to job growth here. At best, it should be positive to job growth here. It is not today," he told CNBC.

Stumpf ticked off some examples of underlying strength in the economy, foremost among them a pickup in housing.

"Housing is really important. Housing has led every recovery or participated in a big way. [Agriculture] is doing relatively well. Energy, who would have ever guessed that we would be potentially self-dependent or self-sufficient [on] energy."

After the Federal Open Market Committee meeting on Wednesday, Bernanke told reporters the Fed will first cut back its bond-buying, and then halt its purchases around mid-2014 as long as the economy holds up.

"The vast, highly unprecedented, highly accommodative monetary policy stance that's been so supportive of the recovery has begun to turn," Michael Gapen, senior U.S. economist for Barclays, told Bloomberg. "The markets for the next several years or more will have to deal with the withdrawal of that support."

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did