History Shows Rate Cuts During High Inflation Can Worsen Housing and Job Markets

Rate cut cycles following high inflation have historically started when inflation was still high, not after it fell.

Housing prices have reacted differently across cities after past rate cut cycles, with some rising and others falling.

In 1983 and 1990, unemployment rose significantly after rate cuts began, peaking at 10.5% and 11.2% respectively.

In 2008, unemployment rose from 4.3% to 6% between when rate cuts started and early 2009.

Current high inflation and household debt levels suggest rate cuts now may negatively impact housing and unemployment as in past cycles.