June 18, 2019
Fannie Mae downgraded its projections for full-year 2019 and 2020 U.S. economic growth to 2.1% and 1.5%, respectively. The government-sponsored corporation’s Economic and Strategic Research Group (ESR Group) attributes the low projections to “expected weakness in business fixed investment and softening global economic conditions.”
“The ratcheting up of international trade tensions, including tariffs applied by the U.S. and China, as well as the threat to impose tariffs on Mexico, could lead to higher prices and a possible reduction in consumer and business confidence,” according to the forecast, which was released June 17. “Potentially effecting a further pull back in consumer spending and business fixed investment.”
The ESR Group does expect housing to continue providing an economic cushion by way of a “lower and stabilizing mortgage rate environment, and a rise in the inventory of homes for sale.” The group previously forecast growth of 2.3% in 2019 and 1.8% in 2020.
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