An economist has warned that a supersized Fed rate cut this month could pose a 'very dangerous' risk to markets.

• One economist believes that a deeper interest rate cut from the Federal Reserve this month could scare financial markets and convey the wrong message about an imminent risk of recession.
• When policymakers at the U.S. central bank meet on Sept. 17-18, it is predicted that they will begin lowering interest rates.
• On Thursday, George Lagarias, the chief economist at Forvis Mazars, stated on CNBC that although no one can predict the magnitude of the Fed's rate cut at its upcoming meeting, he strongly supports a quarter-point reduction.

One economist believes that a deeper interest rate cut from the Federal Reserve this month could scare financial markets and convey the wrong message about an imminent risk of recession.

The U.S. central bank is predicted to decrease interest rates during their meeting on September 17-18, and investors will closely observe economic information to determine the magnitude of the rate reduction.

On Thursday, George Lagarias, the chief economist at Forvis Mazars, stated on CNBC that although no one can predict the magnitude of the Fed's rate cut at its upcoming meeting, he strongly supports a quarter-point reduction.

Lagarias stated that he does not understand the necessity for a 50 basis point reduction.

The 0.01 percentage point reduction could convey a sense of urgency and potentially become a self-fulfilling prophecy, according to him.

"If they went there without a specific reason, it would be very dangerous. However, if there is an event that troubles markets, there is a reason for panic."

How big will the Fed rate cut be?

The range between 5.25%-5.5% is the current target for the Fed's benchmark borrowing rate, which affects a significant number of rates that consumers pay.

On Wednesday, Atlanta Federal Reserve President Raphael Bostic indicated that he is prepared for the central bank to reduce interest rates. This statement was made before the highly anticipated nonfarm payrolls report, which will be released on Friday.

The most probable outcome from the Fed's upcoming meeting is a 25 basis point rate reduction, but recent economic data suggests a larger reduction may be more appropriate.

In July, the number of job openings in the U.S. decreased to its lowest point in 3½ years, indicating a possible slowdown in the labor market, according to data published on Wednesday.

Despite initial expectations of a rate cut at the Fed's next meeting, market participants are now pricing in a half-point reduction after the release of the JOLTS report.

The CME Group's FedWatch Tool indicates that traders are currently pricing in a 59% chance of a 25 basis point rate cut in September, with 41% pricing in a 50 basis point rate reduction.

'Very far from a recession'

On Thursday, investors will likely evaluate new economic data in addition to the monthly jobs report on Friday. The data includes ADP employment figures for August, the latest weekly initial jobless claims, and Institute for Supply Management services data for August.

According to Lagarias, there is a slowdown occurring, but he believes we are not close to a recession. He acknowledges that there is a decline in the jobs market, but he attributes some of it to an increase in supply rather than a decrease in demand.

"Although job openings and manufacturing are weaker than expected, there is no evidence of a recession, and the Fed is unlikely to act aggressively."

The Fed should be cautioned against a half-point reduction this month, as Lagarias is not the only one to do so.

According to Mohit Kumar, the chief financial economist for Europe at Jefferies, there is no need for the Fed to cut by 50 basis points at the September meeting.

— CNBC's Jeff Cox contributed to this report.