Fannie Mae's Economic and Strategic Research (ESR) Group released its February 2025 commentary, maintaining its gross domestic product (GDP) outlook at 2.2% Q4/Q4 for 2025. This indicates a stable expectation for overall economic growth.
However, the ESR Group revised upward its expectations for the Consumer Price Index (CPI), now forecasting it to end 2025 at 2.8% on a year-over-year basis, up from a previous estimate of 2.5%. The economy entered 2025 with strong momentum.
This economic outlook is significant for Fannie Mae as stable GDP growth supports housing market activity, while a higher CPI forecast could influence interest rate expectations. Changes in interest rates directly impact mortgage rates, affecting affordability and demand for Fannie Mae's products.
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