US economy facing ‘modest’ recession next year, Fannie Mae says

Morgan Creek Capital Management Mark Yusko discusses Federal Reserve’s response to inflation.

The U.S. economic outlook is dimming and a downturn could be on the horizon as the Federal Reserve moves to tame the hottest inflation in four decades, according to Fannie Mae economists.

The mortgage lender said in a new economic and housing forecast that the economy faces a “modest recession” in 2023 as a result of the Fed’s aggressive monetary policy tightening trajectory, fallout from the Russian war in Ukraine and the worst inflation in a generation.

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“We continue to see multiple drivers of economic growth through 2022, but the need to rein in inflation, combined with other economic indicators, such as the recent inversion of the Treasury yield curve, led us to meaningfully downgrade our expectations for economic growth in 2023,” Doug Duncan, Fannie Mae’s…

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