The good news is that the outer layer of rubber is cosmetic and protective, not structural. The bad news is that the pressure retaining liner inside the tire has failed and is leaking air pressure through the carcass of the tire. In general, a blister like that will grow over time, eventually burst and it's anybody's guess as to how quickly the tire will lose pressure. Most often, quite slowly. HOWEVER, there is always the risk of sudden pressure loss through the sidewall.
Poke a hole in the blister, if you don't want it to grow. The suggestion above is correct, drive to the tire store and replace the tire.
EDIT: I installed some Hankook HR-II tires on my old jag. Every one of them blistered, including under the tread! Horrible quality. Did not abuse the tires, and the replacement Michelin's have been superb.