Core Inflation

Recession is still on the horizon, but housing may support the economy moving through it, according to Fannie Mae’s Economic and Strategic Research Group. In recent commentary, the group noted that mixed economic data has muddied the waters on the economy’s strength. But recession “remains the most likely outcome” of tightening monetary policy and late-stage business cycle dynamics. Inflation has improved thanks to slowing domestic and global economic growth, but core inflation is still sticky. “Lessons learned from the inflationary era of the 1970-80s … lead the ESR Group to expect that the Fed will maintain its restrictive monetary policy stance until it is abundantly clear that inflation pressures from the labor market have eased,” the group stated. But that…