This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Fiscal Debate Weighs On Fragile Economic Recovery

WASHINGTON, Oct. 17, 2013 /PRNewswire/ -- Incoming economic data show that growth slowed in the third quarter, although recent fiscal risks threaten a previously expected pickup in growth in the current quarter, according to Fannie Mae's (OTC Bulletin Board: FNMA) Economic & Strategic Research Group. Consumers remain key to the outlook, but factors such as the recent federal government shutdown and the furlough of 500,000 workers, as well as the debt ceiling debate, which was resolved temporarily on October 16, appear to be weighing on consumer confidence and tempering real consumer spending. As a result of the fiscal events and the slowing momentum in economic activity from the second quarter to the third quarter, full-year growth is expected to come in at 1.9 percent, a slight downgrade from 2.0 percent in the prior forecast.

"Our October economic and housing forecast is largely unchanged from the previous forecast as we anticipated the modest levels of consumer spending seen toward the end of the third quarter. However, fiscal uncertainties associated with the federal government shutdown, the protracted negotiations to raise the debt ceiling, and the timing of the Federal Reserve's tapering of its asset purchase program, pose significant downside risks to economic activity in the current quarter," said Fannie Mae Chief Economist Doug Duncan. "In particular, the contentious Congressional negotiations that led ultimately to Congress raising the debt ceiling may have a lingering effect on consumer attitudes and spending, as was seen following the 2011 negotiations."

"On the bright side, these fiscal policy issues appear to have had only minimal effect on the housing market to date, which continues to improve overall," said Duncan. "Notably, the rapid appreciation of home prices during the past year has contributed significantly to household net worth gains and may help to cushion some of the fallout from the fiscal policy debate. Also, the Fed's continuation of securities purchases will likely keep mortgage rates low, enabling more homeowners to take advantage of refinance opportunities."

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs