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Fannie Mae Dims Forecast for 2022 Economic Growth
The combination of a less accommodative interest rate environment and an increasingly worker-scarce labor market has led Fannie Mae’s Economic and Strategic Research Group. to downgrade its expectations for 2022 real GDP growth from 3.1% to 2.8%. However, the group’s expectations for 2023 headline growth remain unchanged at 2.2%, a pace that approaches the long-run trend.
Risks to the forecast include uncertainty over the future course of inflation, potential geopolitical developments in Eastern Europe, and currently unforeseen COVID-related disruptions to consumer behavior and the labor market.
“Headline inflation will likely decline from year-ago levels as price pressures ease, but upward price pressures are not expected to be as fleeting as initially thought,” said Fannie Mae chief economist Doug Duncan. “Compared to a few months ago, financial markets now expect a substantially more aggressive monetary posture from the nation’s central bank, which is likely to result in heightened volatility.
- ◦Financing
- ◦Economy
