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Fannie Mae Upgrades GDP, Many Housing Forecasts
Tuesday, February 18, 2020
Fannie Mae says the U.S. economy appears to be sustaining itself despite both
the problems faced by Boeing and the fears about the global impact of the coronavirus.
The company's Economic and Strategic Research (ESR) group is upgrading its
forecast for business fixed investment (BFI) in the second half of 2020 and
beyond and have upgraded expectations for the GDP in both 2020 and 2021 by a
tenth percent to 2.2 percent and 2.1 percent respectively. The company's
economists also expect greater strength in every part of the housing market
over the next 18 months.
The group did substantially downgrade their annualized GDP forecast for the
first quarter of this year from 2.3 percent to 1.9. They state that this does
not reflect a change in their view of underlying growth but rather that
expected government spending and housing construction were partially realized
in the last quarter of 2019 and that the abnormal growth in net exports over
the fourth quarter will be reversed. The 2nd quarter forecast remains
at 2.0 percent, but they expect considerable improvement in the second half of
the year due to the aforementioned gains in BFI and net exports as Boeing resumes
production of its grounded aircraft.
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