Desperate investors scrambling for yields sent the 10-year Treasury to its lowest level in 10 months, veteran trader Art Cashin told CNBC.
The yield hit a low of 2.44 percent on Wednesday, despite the fact that the tapering by the Federal Reserve is getting to a point where it should start pushing yields up, said Cashin, director of floor operations at UBS. That's because investors are focusing on what's happening in Europe.
"It's not a simple answer like a flight to safety. I think it is a global scramble for yields," he said in an interview with "Closing Bell." People are "desperate and paying anything they can to buy that 10-year."
Read MoreTreasury yields dip to new 2014 lows
Although the credit markets are still strong and "things continue to move in the right direction," he said the next three weeks will be interesting.
"What [European Central Bank President Mario] Draghi does may set all these markets akilter because he can't do the kind of QE that we do."
The ECB, which meets next week, is expected to cut rates, but it is not anticipated that they will institute a quantitative easing program to buy bonds.
Cashin thinks if yields continue to fall, it will have a ripple effect.
"They can go down to 2.35, maybe even 2.25 [and] that can begin to … influence mortgage rates, you could get refinancing," he said. "There's a lot at stake, but I want to see where they go first. "
—By CNBC's Michelle Fox. CNBC's Patti Domm contributed to this report.