A Study on the Correlation between the U.S. Interest Rate Cut Cycle and the Fluctuations in China's Real Estate Market

As a pivotal player in the global economy, the interest rate decisions of the Federal Reserve Board (Fed) exert substantial influence on international financial markets, shaping capital flows, investment behaviors, and market expectations worldwide. In recent years, multiple rounds of Fed interest rate cuts have generated pronounced market reactions, particularly in China, the world's second-largest economy, where the real estate sector exhibits heightened sensitivity to global monetary policy shifts. This study employs a combination of data analysis, graphical representation, quantitative evaluation, and case study methodology to systematically examine the relationship between the Fed's interest rate reduction cycles and fluctuations in China's real estate market. The analysis demonstrates that interest rate cuts indirectly and directly impact the Chinese real estate sector through several channels, including exchange rate adjustments, changes in capital market dynamics, and shifts in domestic and foreign investment patterns. Empirical evidence indicates a statistically significant correlation between the timing and magnitude of interest rate cuts and volatility in the real estate market, suggesting that periods of monetary easing often stimulate capital inflows into China, intensify price volatility, and elevate leverage-related risks within the property sector. These findings highlight the importance for policymakers, investors, and market participants to consider global monetary conditions when assessing domestic real estate stability and risk management strategies, and they provide a nuanced understanding of how international monetary policy tools can transmit across national borders to influence sector-specific economic outcomes.