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Fannie Mae Again Cuts Forecast for Full-Year GDP Growth
For the third consecutive month, Fannie Mae’s Economic and Strategic Research Group revised downward its full-year 2021 real GDP growth projections. The downgrade from 5.4% to 4.9% is due to the group’s more pessimistic view of the speed at which current supply chain disruptions will resolve, along with its upwardly revised inflation projections and expectation that services-related consumer spending will take longer to return to a more historically normal level.
“While we still view the supply chain disruptions and, to a lesser extent, labor market tightness as largely transitory, we now expect both to last even longer than we’d previously forecast—and also likely longer than the Federal Reserve anticipated,” said Doug Duncan, chief economist at Fannie Mae.
He continued, “Combined with our expectation that inflation will run above-target over the forecast horizon, we foresee growing clamor from market participants for the Fed to begin tightening monetary policy.”
- ◦Economy
