Laity can bless, but not in this rite: I bless you almighty Child of God in the Name of the Father, Son, and Holy Spirit…
Only a priest can bless like that.
But laity can simply say, Bless you, and you will be blessed.
Laity cannot bless objects, only a priest.
…and deacon and bishop…
If the priest calls you an “almighty child of God” as he gives you a blessing, please direct him to the book of blessings…

sorry, I had to write that.
The authority comes from his ordination. All three members of the hierarchy are given authority by God, each with a certain level of authority. Deacon being the lowest of the hierarchy, then priest, then of course the bishop. Each participates in that Priesthood of Christ, again on the level of the office. The bishop is that fullness of the priesthood.
Jesus Himself ordained the Apostles and gave them the authority to bind and loose. As God’s minister, when I bless objects or people it is God conferring the blessing through His lowly minister.
Deacons are authorized to bless most sacramentals, water, salt, etc. Some of the blessings particular to certain orders can be blessed only by priests of that order, although not many of these particular situations still exist. Most orders like Benedictines have relaxed that requirement.
Priests and deacons, for the most part, can bless anything that is not reserved for the bishop specifically.
One point to mention, I a person comes up to me and asks me to bless an article for them and a priest is next to me, I should defer to the priest, because he is of higher authority. I do this often after Mass, I simply tell them yes I could but Father is here so he should be the one to bless. They seem to understand the hierarchy.