Evercore ISI Chairman Ed Hyman sees an "insurance" rate cut in July and more to follow as the inverted yield curve is making him "quite uncomfortable."

"I think they are going to ease in July and ease a couple of more times to try and get yield curve positive again and also put some insurance in the system for the trade issue," Hyman said Friday on CNBC's Squawk On the Street.

The top economist said the yield-curve inversion, a reliable recession indicator, is the number one risk weighing on the market. The yield on the 10-year Treasury yield remains lower than the rate on the three-month bill Friday.

"Every time in the past it has worked...That's a precursor to recession... It makes me quite uncomfortable… but it has to stay this way for another couple of months before it gives a real signal," Hyman said.

Hyman, who has been ranked the top economist in Institutional Investor's annual poll for more than three decades, believes the Federal Reserve should come to terms that a trade deal between the U.S. and China is not coming anytime soon.

"I think the Fed has to go on their supposition that the trade tensions could go on for quite a while. It's sort of a cat and mouse between the two," Hyman said.

He added another reason for an easing of the monetary policy is the persistently low inflation. He cited the consumer price index that barely rose in May.

Hyman's rate-cut forecast is in line with the market's expectation. Traders are pricing in a nearly 90% chance of at least one rate cut in July and about 90% probability of three more rate cuts this year, according to the CME FedWatch tool.

The Federal Open Market Committee begins its two-day policy meeting on Tuesday.