The U.S. Federal Reserve will likely cut interest rates by Labour Day as the United States is grappling with a “fundamentally soft” economy right now, according to David Rosenberg.

The chief economist and strategist at Gluskin Sheff + Associates said U.S. Fed Chair Jerome Powell will need to play catch-up after coming off a "huge" tightening cycle.

“It’s probably one of the few things I actually agreed with Trump on, was that the Fed overstayed its tightening… We’re seeing the spillover impact,” Rosenberg told BNN Bloomberg’s Catherine Murray Thursday. “The domestic U.S. economy is fundamentally soft right now for all the talk about how great the first quarter was.

“[It] might not technically be a recession, but it’s one rung away. It’s called a stalled-speed domestic economy.”

In its last decision, Fed policymakers left rates unchanged, reiterating their pledge to be “patient” in weighing future moves. The central bank raised rates nine times between the end of 2015 and the end of 2018, with four of the increases under Powell.

The last time the Fed reduced interest rates was during the financial crisis in 2008.

Rosenberg added he expects more than one rate cut from the Fed.

“I think they’ll be cutting rates by the end of the summer. I think they’ll be laying the groundwork probably at the Humphrey Hawkins testimony in July, then the Jackson Hole symposium in August,” Rosenberg said.

“The Fed doesn’t just cut rates just once, ever… The Fed is so far behind the curve that I think in the next 12 months, we’re going right back down to zero on the funds rate.”