Fannie Mae Sees 'Unspectacular' Economic Growth
February 17 2016 - 9:40AM
Dow Jones News
Fannie Mae said economic growth could remain "unspectacular"
this year despite a healthier labor market, according to a new
report from the mortgage-finance company.
As a result of the lackluster growth and weak inflation, Fannie
Mae said it now expects the Federal Reserve to raise interest rates
just twice this year instead of three times. That comes despite
tightening in the labor market, which is expected to boost wages
and drive higher consumer spending.
Also weighing on the U.S. economy this year are a strong U.S.
dollar and struggling economies abroad, which Fannie said have hurt
manufacturing and exports.
The comments came as Fannie's economic and strategic research
group released its February outlook for the economy and housing
market.
Fannie expects improvement in the housing market, as home price
increases help lift underwater mortgages. Low mortgage rates and
easier borrowing are also expected to drive growth in the housing
market, while single-family home production is expected to pick up
this year.
Fannie and peer Freddie Mac don't make mortgages. They buy them
from lenders, wrap the loans into securities and provide guarantees
to make investors whole if the loans default.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 17, 2016 10:25 ET (15:25 GMT)
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