'Obstinate' Fed won't budge this week: Cashin

The Federal Reserve will have to be "dragged kicking and screaming" if and when it changes course on monetary policy, but that is unlikely to happen when central bankers conclude their two-day meeting Wednesday, UBS' Art Cashin said Tuesday.

UBS' director of floor operations at the New York Stock Exchange reiterated his expectation that the Fed's policymaking committee will guide rates back down to zero before they ever reach 1 percent.

The Federal Open Markets Committee hiked rates by 25 basis points in December, its first rate hike in a decade. The FOMC is meeting this week to discuss monetary policy, with a statement but no press conference scheduled at the end of the gathering.

"I think they will be somewhat obstinate tomorrow," Cashin told CNBC's "Squawk Alley." "They don't want to yield too much and say, yes, you're right, we were wrong. They're going to fight to maintain what they think is their credibility, but I don't think we're going to see any rate hikes anymore."

To be sure, a survey conducted by CNBC found that 88 percent of respondents expect the Fed's next move to be another interest rate hike, though many now see that action coming later, in May. Just 13 percent believe the Fed will either cut rates or launch another round of quantitative easing.

Cashin noted that the manufacturing sector had already fallen into recession prior to the Fed's first rate hike and said the risk remains open that the services sector could follow suit.

Kevin Caron, market strategist at Stifel Financial, said Tuesday the Fed is trying to hold onto the idea the economy is getting better, unemployment is coming down, and the dip in inflation is transient and based solely on falling energy commodity prices.

With no press conference scheduled, it would be too risky for the Fed to pivot on from its established policy on Wednesday, he said. The more important focal point for markets is the Fed's March meeting, he added.

"If the data continues to worsen, when you look out to March, you're going to have not only the Fed with a full meeting, but you're also going to have the [European Central Bank] and the Bank of Japan looking to to do something, or potentially do something," he told CNBC's "Squawk on the Street."

Last week ECB president Mario Draghi said downside risks in Europe were once again bubbling up and more stimulus may be needed.

Former Dallas Federal Reserve Gerald O'Driscoll said the Fed's actions had increased the prospects of financial market turmoil.

"The Fed is between a rock and a hard place, and they put themselves there," he said in an interview on "Squawk on the Street."

"On the one hand now, they're being forced to do the rate raise at a very inopportune time, but if they back off … these bubbles are just going to inflate even more."