Since 1950, When the Fed Starts to Cut Rates, the Unemployment Rate Has Spiked

Historically, when the Federal Reserve starts cutting rates, the unemployment rate often spikes, usually beginning three months after the first cut and averaging around 7.5%. In contrast, the Fed’s current projection is for the unemployment rate to rise only to 4.1%, just 0.4% above the current level. This pattern suggests that achieving a “soft landing” for the economy is unlikely, based on past trends.