Why GDP Forecasts Shifted and Implications for CRE
Major Firms Raise GDP Forecasts for 2023
- The Blue Chip Economic Indicators report released in February shows lifted growth expectations in 2023
- Only two economists in the report are forecasting negative growth this year, down from 7 last month
Does The Shifting Outlook Point To A Soft Landing?
- While sentiment is rising, it is still possible for the economy to reach a recession and achieve modest growth during 2023
- Positive economic indicators like rising retail sales and labor expansion suggest the economy is healthy, but could also sustain more persistent inflation
How will this Impact CRE Investors
- Right now, we are expecting a 25-bps lifts to the Fed Funds Rate each of the next two meetings, but if Fed officials think the economy is running too hot, they could utilize another 50-bps lift
- Smaller lifts give CRE markets more time to react to conditions, while a larger lift could create a disconnect between buyer and seller while the market recalibrates
*Through February 2023
Sources: Marcus & Millichap Research Services, BLS
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