Noting on economic and housing viewpoint for November, Federal National Mortgage Assctn Fnni Me (OTCMKTS:FNMA) posted that the planned change in the U.S. administration will lead in new concerns in the economy. Still, the market can expect modest growth for FY2016 and FY2017.
There is slowdown in investment and job growth, which suggests that the economic expansion is now in a late-cycle stage. Here, the growth appears to be moderate and, so makes the economy susceptible to shocks. Though market unpredictability may rise in the medium term as procedure changes happens, the ESR Group predicts economic growth to improve in 2H2016, coming at 2.4%, after 1.1% growth in 1H2016. The FY2016 estimated growth figure remains at 1.8%, with same performance expected for FY2017.
The expert view
Doug Duncan of Federal National reported that they haven’t revised the general tone of estimate at this time, still they intend to come up with new policy expectations as and when they seem to be concrete. Considering campaign plans, they may look for some policies change pertaining to tax rates, infrastructure investment, government spending, immigration and health care.
Depending on the looming President’s policy primacies, the estimate for 2017 is dependent on both shortcoming and positive aspects. For instance, they predict near-term growth can be attained from any spending surge and tax reductions that are done. However, if new policies bring in higher rates on Mexico and China, reconsidering the Trans-Pacific link, and talking on the North American Free Trade contract, it can negatively impact growth.
In 4Q2016 GDP prediction, they anticipate domestic sales to enhance and commercial investment in equipment to recuperate, offered an improving segment of core durable goods. Still, they don’t predict a considerable turnaround in imminent period on condition of government policy facing operations.
Federal National posted that consumer spending will turn to be a prime growth driver, although they predict clients will remain cautious considering recent softness in real disposable income.