National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Fannie Mae Projects Modest Recession in 2023
Although economic growth is projected to resume in 2022’s second half, the combination of high inflation, monetary policy tightening and a slowing housing market will likely tip the economy into a modest recession next year, according to Fannie Mae’s Economic and Strategic Research (ESR) Group.
The ESR Group continues to forecast 0.0% real GDP growth on a full-year basis through 2022 but revised downward its expectations for full-year 2023 growth by one-tenth of a percentage point to negative 0.5%. The ESR Group’s baseline forecast anticipates the federal funds rate topping out at 3.5% to 3.75% in early 2023.
“In our view, the recent interest rate surge is due to the market’s recognition of two critical factors: that inflation is indeed not transitory, and that, to tame it, the Federal Reserve will need to be resolute, even at the risk of possible recession,” said Doug Duncan, Fannie Mae chief economist.
- ◦Economy
