Art Cashin says the Federal Reserve can’t go back to higher interest rate hikes after easing down. “They made the mistake, if you would, of beginning to decelerate. They went from 50 [basis points] down to 25. If you reaccelerate, if you go back up to a 50, that tells the market there’s a good chance you made a mistake. It’s a kind of ‘uh oh’ move. So they are going to move heaven and earth not to have to reaccelerate,” the UBS Financial Services’ director of floor operations said in a Friday appearance on CNBC’s ” Squawk on the Street .” “But that may mean that you continue on the longer side. Three 25s, maybe even four 25s. The Fed’s in a psychologically difficult point here about reaccelerating,” Cashin continued. That follows Thursday comments from Atlanta Fed President Raphael Bostic who said he’s “firmly” in favor of 25 basis point rate hikes , instead of the 50 basis point increase some other Fed officials have called for. Stocks reacted favorably to those comments, with all three major averages on pace for a positive week . Regardless, Cashin said he expects trouble ahead for markets, and urged investors to keep an eye on some technical levels. He’s watching for a breach of the 4.10% level in the 10-year Treasury yield, as well as the 4,025 level in the S & P 500 . “It looks to me like the oversold bounce that we got out of Salesforce yesterday, the influence on the market might carry on until maybe Tuesday of next week,” Cashin said. “And then I think we go back to putting pressure on the market and retest lows.”
