To Evercore ISI Chairman Ed Hyman, the so-called Fed put is alive and well.
Hyman, who has been ranked the top economist in Institutional Investor's annual poll for more than three decades, believes the Federal Reserve will deliver a interest-rate cut this week, giving the economy a needed jolt.
"This will be the third rate cut and that's been sort of the magic sauce in the 1990s to get growth to stop slowing," Hyman said on CNBC's Squawk Alley on Monday. "They feel like they are in sort of a familiar territory if this works out, and the stock market rallying is a suggestion that it is working out."
In 1995-1996 and 1998, the Alan Greenspan-led Fed slashed rates three times during both periods to combat an economic downturn and successfully prolong the expansion that ended up being the second longest in history, Hyman noted.
The S&P 500 hit a new all-time high on Monday on the back of strong earnings and positive signs of a U.S.-China phase one trade deal. The central bank will announce its decision on interest rates on Wednesday. It is widely expected to cut interest rates for the third-straight time this year.
"Our best guess is that [chairman] Powell will not give a particularly dovish interpretation this week when they cut rates ... or a particularly hawkish one. He's going to tread in the middle of there and leave the option there to stop easing if he needs to," Hyman said.