Want to know if the Fed will cut rates this December? To answer that, we need to start with their two core mandates.

The Fed’s dual mandate is actually pretty straightforward: keep prices stable and maintain maximum employment. Every interest rate decision revolves around these two things, so let’s break them down one by one.

**What about inflation?**
Focus on the PCE index (Personal Consumption Expenditures Price Index) and core PCE. Simply put, if the inflation rate steadily drifts toward the 2% target—say, drops below 2.5% and keeps going lower—then there’s a solid case for a rate cut. But if the data suddenly rebounds or stays stuck at a high level for a long time? Forget it, the Fed won’t take that risk.

**How strong is the job market?**
Here, watch three things: new job creation, the unemployment rate, and wage growth. If unemployment clearly rises or wage growth starts to weaken, it signals the economy might be cooling down—in that scenario, a rate cut could help. On the flip side, if the labor market is still running hot and wages are rising fast, cutting rates would just pour fuel on the inflation fire.

**What about economic growth?**
Finally, look at GDP and consumer spending data. If the economy is expanding too quickly, there’s no need for a rate cut; if growth slows down or recession risks start to appear, then a cut makes sense.

The bottom line? Whether rates get cut in December depends on what these numbers show. The Fed never gambles—they just follow the data.