According to @KobeissiLetter, the Federal Reserve will cut interest rates in 13 days citing a weaker labor market while Core CPI has risen back above 3%, 110 bps over the 2% target, source: @KobeissiLetter. The Fed targets 2% inflation as measured by PCE, not CPI, a distinction that matters for interpreting policy credibility and market reaction, source: Board of Governors of the Federal Reserve System. Rate cuts typically ease financial conditions and influence risk assets, a dynamic that can heighten volatility in crypto such as BTC and ETH around policy decisions, source: Board of Governors of the Federal Reserve System. Traders should watch the policy statement, dot plot, and subsequent labor and inflation releases to gauge real-rate and liquidity paths that drive crypto flows, source: Board of Governors of the Federal Reserve System.

According to @KobeissiLetter, traders are focused on Fed Chair Powell after a mixed inflation print where headline inflation is described as cold, core inflation as hot, and month-over-month inflation as expected (source: @KobeissiLetter). @KobeissiLetter expects a 25 bps rate cut in September, arguing the Fed can point to a weaker labor market despite hotter inflation (source: @KobeissiLetter). The source frames Powell’s upcoming messaging as the key near-term catalyst to watch for markets (source: @KobeissiLetter).