I've been thinking lately about whether the Fed will actually cut rates by the end of the year. To be honest, to answer this question, you first have to figure out what the Fed really cares about.

Their dual mandate is well known—price stability and full employment. The current situation is pretty delicate: on one hand, they have to keep an eye on inflation numbers, and on the other, they need to make sure the job market doesn’t collapse.

Let’s start with inflation. The core PCE is the indicator the Fed values most, and if that number steadily moves toward 2%, then a rate cut is possible. But if inflation suddenly rebounds or gets stuck above 2.5% and doesn’t come down, then you can basically forget about a cut.

Next, let’s look at employment data. Nonfarm payrolls, unemployment rate, and wage growth all need to be considered together. If the unemployment rate suddenly spikes or wage growth slows significantly, it could mean the economy is headed for trouble, making a rate cut reasonable. But if the job market is still running hot, cutting rates might just stoke inflation again.

GDP and consumer data are also crucial. If economic growth slows, the Fed may lean toward easing policy to stimulate things; but if the economy keeps expanding steadily, holding the line might be the safer choice.

For the crypto market, these macro data shifts directly affect capital flows. Rate cuts are usually good for risk assets, but only if the economy isn’t actually falling into recession. So every data release in the coming months before year-end is worth watching closely.