Closely followed trader Art Cashin said Monday that he's "quite doubtful" of the number of interest rate hikes the Federal Reserve has projected for 2019.
A rate hike in December is still "locked in," the UBS director of floor operations at the New York Stock Exchange predicted in a "Squawk on the Street" interview. He argued the Fed will want to avoid appearing "bullied" by President Donald Trump, who has been critical of the central bank's policies under Fed Chairman Jerome Powell.
The target range for the central bank's benchmark federal funds rate, which banks charge each other for overnight lending, stands at 2 percent to 2.25 percent. After its most recent hike, in September, the Fed projected three rate increases for next year. The Fed has already raised rates three times this year, and Wall Street expects another in December.
Stocks surged last week after Powell appeared to walk back comments on Oct. 3 that rates were a long way from so-called neutral. In a speech Wednesday, Powell said rates are "just below" neutral, perhaps indicting that concerns about a more aggressive path higher for rates may no longer be warranted. The S&P 500 had its best week in seven years.
Cashin also said market gains could be capped Monday due to "lack of clarity" on trade following President Donald Trump and Chinese Xi Jinping's agreement over the weekend to halt new tariffs for a 90-day period while talks continue.