Art Cashin: US Treasurys 'Screaming' Deflation
Two-year US Treasury note yields dropped to an all-time low amid talk of European spending cuts and fears of a US double-dip recession. Art Cashin, director of floor operations at UBS Financial Services, and Bernard McSherry, senior vice president at Cuttone & Co., offered CNBC their market and economic insights.
"Cutting back stimulus, all these austerity measures, goes against the grain of traditional economic theory," said McSherry.
He cited a "similar mistake in 1937" in America, as well as "Japan in the '90s."
"We've been worried about inflation, but I'm more worried by deflation."
He pointed to "bad data" on a global scale, especially coming from China, Japan and "Spanish banks." And that international agglomeration of gloom affected US bonds — which are, in turn, sending their own sobering message, he believes.
"The 10-year is below 3 percent. I think that's kinda screaming, 'Look out for deflation,'" Cashin declared.
Opposing Views from...
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- John Paulson Bullish on US
Scorecard—What They'd Said:
- Cashin's Previous CNBC interview (June 21, 2010)
- McSherry's Previous CNBC interview (June 22, 2010)
CNBC's Companies in the News:
- Wal-Mart Names Bill Simon New US CEO
CNBC Data Pages:
Disclosure information was not available for McSherry, Cashin or their respective companies.