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Fannie Mae Expects Stronger Q1 Growth But Still Forecasts Recession
Due mainly to an upward revision in recent consumer spending data, Fannie Mae’s Economic and Strategic Research (ESR) Group now forecasts stronger first-quarter GDP growth but maintains its belief that economic momentum is running out of steam, according to the ESR Group’s latest monthly commentary.
Although the acute panic following the bank failures in March appears to have subsided, the banking turmoil occurred during an already-tightening credit cycle. The ESR Group believes the additional, incremental tightening in credit conditions owing to the financial fallout will contribute to a modest recession beginning in the second half of 2023.
“The economic slowdown has resumed – whether the end result is a modest recession or simply a soft landing remains unanswered – although we continue to expect the former, as we have since April of last year, when we first made our 2023 recession call,” said Doug Duncan, chief economist, Fannie Mae.
- ◦Economy
