Art Cashin says the Fed can’t go back to raising interest rates after easing. “They made a mistake, so to speak, by starting to slow down. They moved from 50 [basis points] All the way down to 25. If you bring back the acceleration, if you go back to 50, that tells the market that there’s a good chance of making a mistake. It’s kind of an “uh-oh” movement. They’re going to take to heaven and earth so they don’t have to re-accelerate,” UBS Financial Services’ ground operations manager said in an appearance Friday on CNBC’s “Squawk on the Street.” “But that could mean you’re going to have a longer side. Three 25s, maybe even four 25s. The Fed is in a psychologically difficult phase here about re-accelerating,” Cashin continued. It followed comments on Thursday from Atlanta Fed President Rafael Bostick who said he was “firmly” in favor of a 25 basis point rate hike, rather than another 50 basis point increase. Officials called for it. Stocks reacted positively to those comments, with all three major averages on track for a positive week. Regardless, Cashin said he expected trouble in the markets and urged investors to watch some technical levels. Breaking through the 4.10% level in the 10-year Treasury yield, as well as the 4025 level in the S&P 500. “It looks to me like the oversold bounce we got from Salesforce yesterday, the effect was on the market, probably until Tuesday next week,” Cashin said. , and then I think we’ll go back to putting pressure on the market and retesting the lows.
Art Cashin on why the Fed can’t go back to massive rate hikes