A recovering economy with increasing spending and borrowing may spark inflation in 2014, NYSE floor legend Art Cashin told CNBC.

That could be mean trouble for the economy and the Federal Reserve.

"Now if money suddenly got velocity, if people began to lend and spend, the Fed would be very, very hard put," said Cashin, managing director of floor operations for UBS Financial Services.

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"If money got velocity, I would think you would see things begin to turn topsy-turvy. They would taper at the speed of sound," he added, referring to the Fed's anticipated reduction of its stimulus.

In an effort to push down long-term interest rates, the Fed has been purchasing $85 billion of Treasury and mortgage bonds a month, but is expected to soon begin winding down the stimulus known as quantitative easing.

Emerging markets may suffer the most when the Fed tapers, Cashin predicted. As rates rise, investors will withdraw their money from emerging markets in pursuit of higher yields in the United States.

"I think you may begin to see people coming back here, in house again, saying: 'You know what? America probably is the safest place to put my money,'" Cashin said.

Cashin doubts corporations will be able to continue increasing earnings just by cutting costs. If stocks are to continue rising, corporations need to increase their revenues.

"We haven't seen that," Cashin explained. "What we've seen instead, and this is the reason Wall Street is doing well and Main Street's not really doing well, is the managers of corporations all around got very resourceful, and they found ways to do more and more with less and less."

Barclays agrees that inflation poses the biggest danger to stocks in 2014, The Wall Street Journal reported.

If growth is faster than expected, wages and rents could increase quickly and prompt inflation, Barclays warned.

The Fed would come under pressure to aggressively taper its stimulus and may even consider raising short-term rates, said Michael Gavin, Barclays' head of asset allocation research for the Americas. The possibility of tightening could cause turbulence in the stock market later next year, he warned, according to The Journal.

Barclays' Chief U.S. Economist Dean Maki predicts the Fed will start tapering in March and close down the program by September.

With inflation in the cards, Barclays advises underweighting U.S. stocks and overweighting European and emerging markets investments.

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