Art Cashin counts himself in the camp that sees the Federal Reserve pushing an interest rate hike out to 2016, but one member of the Federal Open Market Committee could inject uncertainty into the process, he said on Friday.
The director of NYSE floor operations for UBS told CNBC's "Squawk on the Street." that Fed Vice Chair Stanley Fischer could leave investors guessing as to when the central bank will lift rates.
"Stanley Fischer is going to be a very big influence on the FOMC, and he wants to introduce surprise into the game," Cashin said. "He wants the markets not to feel self-assured, and he thinks that that will cause the markets to prediscount things."
The Fed is expected by some to raise its benchmark interest rate—which has been near zero since December 2008—by 25 basis points in September.
Fischer will try to push the FOMC to "at least appear" to be ready for liftoff, he said.
However, soft data is making the market feel better, he added. The Fed has said it will hike rates once economic data indicate the U.S. economy can sustain an increase.
Government data crunchers have delivered markets a string of disappointing reports this week. Retail sales were flat, and both industrial production and producer prices fell in April. On Friday, the University of Michigan reported consumer sentiment dropped to a seven-month low.
Those reports are keeping alive the prevailing notion that bad news is good news, Cashin said. Poor economic numbers are seen propping up equity markets because they encourage the Fed to keep interest rates low. That decreases the cost of borrowing for U.S. companies and pushes investors toward stocks rather than low-yielding bonds.
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"The light data is helping to some degree. You've got the [10-year Treasury] yield down below 2.2 percent. You had all that Treasury refunding this week, so the big supply is out of the way," he said, referring to the U.S. bond auction.
He continued to say, "We were all hoping—the bulls were hoping, certainly—that if you broke out of this narrow range you'd inspire some short covering, some follow-through, some sideline money. None of it has come about. This is a very, very disappointing breakout."
Equity markets can rally substantially from present levels if indeed the Federal Reserve delays a rate hike, Cashin said, though companies need to continue to deliver positive earnings.