Commenting on economic and housing outlook for November 2016, Federal National Mortgage Assctn Fnni Me (OTCMKTS:FNMA) stated that the upcoming change in the U.S. administration will bring new uncertainties related to the economy, however, modest growth is projected for FY2016 and FY2017.

The slowdown in business investment and job growth indicates the economic expansion has moved to a late-cycle stage, in which growth seems to moderate and, hence, makes the economy vulnerable to shocks. Though market volatility may increase in the medium term as policy changes take shape, the ESR Group anticipates economic growth to pick up in 2H2016, averaging 2.4%, following 1.1% growth IN the first half. The FY2016 growth estimate remains at 1.8%, with a similar pace of development anticipated for 2017.

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Doug Duncan of Federal National said that they haven’t altered the general tone of their estimate at this time, however, they will implement new policy expectations as they turn to be more concrete. Considering campaign themes, they may witness some changes in policies pertaining to individual and corporate tax rates, government spending, infrastructure investment, immigration and health care.

Depending on the imminent President’s policy priorities, the estimate for 2017 is reliant on both downside and upside risks. For instance, they anticipate near-term growth can be achieved from any spending increases and tax cuts that are done, but if new policies led in sharply higher tariffs on Mexico and China, rethinking the Trans-Pacific association, and discussing again on the North American Free Trade deal, it would probably drag on growth.

In 4Q2016 GDP forecast, they anticipate domestic sales to improve and commercial investment in equipment to recover, provided a recent improving market of core durable goods. However, they don’t expect a considerable turnaround in coming period provided the doubt of government policy facing operations.

Federal National also reported that consumer spending is going to a major growth driver, although they anticipate customers will remain cautious provided recent weakness in real disposable income.