National + Finance | June 26, 2023

Amid Mixed Data, Fannie Mae Sees Recession as “Most Likely”

Mixed data have painted a muddled picture of macroeconomic conditions in recent months, though a recession remains the most likely outcome of the rapid tightening of monetary policy and late-stage business cycle dynamics, Fannie Mae’s Economic and Strategic Research (ESR) Group said Monday.

Lessons learned from the inflationary era of the 1970-80s lead the ESR Group to expect that the Federal Reserve will maintain its restrictive monetary policy stance until it’s “abundantly clear” that inflation pressures from the labor market have eased. However, that evidence likely won’t appear until a recession is already unavoidable.

“Core inflation remains sticky, having not fallen as rapidly as other price measures, creating upside risk to the federal funds rate, as noted in the Fed’s Summary of Economic Projections, and making it likely in our view that it maintains a restrictive posture for longer than most market participants initially anticipated,” said chief economist Doug Duncan.

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Fannie Mae ESR Group

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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