We’ve been warning of a potential recession coming. Now Fannie Mae says the US is facing a ‘modest’ recession within the next year.
We first warned about a Biden recession in March. The economy was getting smaller, it was not growing.
However, after the COVID shutdowns which arguably were not necessary and which created a major self-induced economic downturn, the Trump economy rebounded quickly, much quicker than anyone thought. By September of 2020, the Trump economy was back and nearly to the levels before the shutdowns were put in place.
But then came the 2020 Election and Joe Biden. After massive government spending, on God knows what, the economy began to contract late last year. The highest the US GDP has been was last October according to the latest IHS Markit data.
Now Fannie Mae, the US mortgage giant, is saying the US will be in a recession next year. This was reported yesterday by multiple news outlets. FOX Business reported:
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.
“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 chief economist, said in a statement.
We’ll have to see about those drivers of economic growth in 2022 but it certainly does look like a recession is in the works.