A Brief Economic Outlook

With another short work week and quiet economic reporting, we turn to the prognosticators for a brief outlook of the year ahead.  One of my favorites is Standard & Poors.  S&P is making some positive predictions within its recently published 2014 US Housing and Residential Mortgage Finance outlook.  They see just a 15-20% risk of a recession, continued declines in negative home equity rates (meaning that homes will continue to appreciate—as notes in the next item forecasted), and a 6% increase in the S&P Case Shiller 20-City Home Price Index (6% is a healthy average year, and in line with more historical rates of appreciation).

And what of interest rates?  Outspoken rate hawk Philadelphia Federal Reserve President Charles Plosser today warned of rapidly rising rates in the future.  Two weeks ago, the Fed recommitted to keeping interest rates low until the Unemployment Rate declines further, but Mr. Plosser just became a voting member of the FOMC three days ago so watch out.