Fannie Mae’s Douglas Duncan is optimistic about the outlook for the domestic market

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“Market demand has advanced much more than supply,” he said. “Those are the things that we expect to fix when the chip supply is restored.”

Inflation is not a concern – for now

Although inflation is now 5% – the highest level since 2008 – Duncan believes inflationary pressures are “temporary” (the same word was used by the Federal Reserve on Wednesday).

While the pressure is largely driven by COVID-related factors that are expected to subside, he acknowledges that “sustained inflation” could hold back growth, as is the case with the Economic and Strategic Research Group (ESR), which recently predicted a slowdown in economic growth to 5.5% in Q4, up from the current estimate of 7.1%, and this decline will continue through 2022.

The fact is that The Fed also hinted that up to two rate hikes could occur in 2023. – which strongly contradicts market expectations – suggests that inflation is more than a trifling issue.

“We do believe inflation will be around 5% this year – this is the general rate – and of course the Fed would like to see that, but they are going to be patient and let inflation exceed their 2% target. average, ”Duncan said.

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