If the Federal Reserve fails to signal on Wednesday a rate cut, the June rally could hit the skids,Wall Street bull Tony Dwyer warns.

The Canaccord Genuity chief market strategist contends it’s necessary for the Fed to ease soon to correct a policy mistake and boost the economy.

“We don’t think the Fed needs to cut rates for some kind of emergency,” Dwyer told CNBC’s “Trading Nation ” on Monday. “They need to take back just an excessive move from the end of last year.”

He’s urging policymakers to listen to the U.S. Treasury market. According to Dwyer, it has been “screaming” at the Fed to lower rates because inflation never emerged as a problem.

“The Fed should follow what the Treasury yields along the yield curve have already done and come down — which should help kick-start a little bit of economic activity into the second half,” Dwyer said. “We’re clearly slowing down.”

The 10-year Treasury note yield has slumped 22% this year. Right now, it’s yielding less than a fraction above 2%.

“The Treasury market is telling the Fed to ease because of lesser inflationary pressures,” Dwyer said.

He anticipates policymakers will hold interest rates where they are on Wednesday. However, Dwyer expects the Fed statement will include fresh language that indicates a move in July is possible. And, he suggests that will leave the door open to new highs.

New market highs coming?

Dwyer may have a conservative 2,950 year-end price target on the S&P 500, but his 2020 target is 3,350, a 16% jump from current levels.

“Our confidence level next year is pretty solid,” Dwyer said.

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