An economist predicts that the Fed will not resort to a jumbo rate cut and will not trigger panic.

• According to Carl Weinberg, chief economist at High Frequency Economics, there is no data indicating a need for the Fed to make a sudden and drastic 50 basis point rate cut.
• On Thursday, U.S. labor market data provided mixed signals about the economy, while concerns arose over the Fed's decision to keep interest rates higher for a longer period than necessary.

This month, the U.S. Federal Reserve will make a rate decision, and according to Carl Weinberg of High Frequency Economics, a significant interest rate reduction is unlikely to occur.

It is anticipated that policymakers at the U.S. central bank will commence lowering interest rates during their meeting on Sept. 17-18, signaling a change from the post-pandemic policy tightening that has sparked concerns about a U.S. recession.

According to Weinberg, chief economist at High Frequency Economics, there is no evidence in the data that would prompt the Fed to make a sudden and drastic 50 basis point rate cut. Instead, he believes that a more moderate 25 basis point cut would be more appropriate for the current economic situation.

Although there has been a decrease in job hiring, the most recent unemployment data shows a decline in initial claims.

On Thursday, U.S. labor market data provided mixed signals about the economy, while concerns arose over the Fed's decision to keep interest rates higher for a longer period than necessary.

While private sector payrolls grew at their slowest pace since 2021, concerns about a sharp slowdown in the labor market were raised. However, weekly unemployment benefit claims fell compared to the previous week.

To persuade the Fed to raise interest rates by 50 basis points, Weinberg believes that a significant increase in initial unemployment claims, proof of widespread layoffs, and a complete halt in new hires are necessary.

Weinberg noted that real interest rates have increased while inflation has decreased, and while the Fed may need to take action, it doesn't have to resort to a drastic 50 basis point cut.

The benchmark borrowing rate set by the Fed, which affects a wide range of rates that consumers pay, is currently between 5.25% and 5.50%.

Some market watchers believe that a 50-basis-point reduction may still be possible, given the anticipation of a significant economic release later today - the August jobs report.

"The Fed can potentially ease its policy rate by up to 50 basis points due to a looser, softer jobs market, according to Ben Emons, founder of Fed Watch Advisors. However, he noted that the labor market's momentum is declining."

The unemployment rate is predicted to decrease to 4.2% in August, with nonfarm payrolls expected to increase by 161,000, according to Dow Jones. However, recent data suggests a slowdown in hiring, which may affect this forecast.

Emons stated that while nonfarm payrolls may show a positive result, a "low point" figure of under 100,000 is still possible.

He wrote in a note on Friday that the soft print (<100K) is negative for risk sentiment because the market will price in a weakening labor market instead of a loosening labor market with a growth scare turning to a recession scare.

If the number sets the job market's downside scenario in motion, the Fed will react faster, which can ultimately cement the next major bottom in the S&P 500 around or slightly below the 200-day moving average.

—CNBC's Jeff Cox contributed to this report.