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.
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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