Issue link: http://palletcentral.uberflip.com/i/801657
24 PalletCentral • January-February 2017 palletcentral.com Although higher interest rates will affect some buyers, affordability on average remains near record levels. Second, lending standards should ease if the Trump team reforms some financial constraints put in place after the financial crisis in 2008. Trump and several of his key economic advisers support revision to the Frank- Dodd regulations and to major changes for Fannie Mae and Freddie Mac. Bottom Line: Sustained Growth Through 2018 The current situation of the economy, plus likely actions by the Trump Administration, should push growth a bit higher in 2017-18. Because the economic recovery is now approaching 7 years, some analysts are forecasting a recession in the next few years. These forecasts are based on historic averages for economic cycles. But there is nothing on the horizon, outside of a major financial crisis in China or an international trade war, that is likely to trigger a recession. Interest rates are headed higher. The expected growth and even lower unemployment guarantees the Federal Reserve (Fed) will keep boosting rates in 2017. Rates could rise even faster in 2018 if the budget deficit moves higher given the Trump tax cuts and spending increases. This was an initial pass at what the next few years might hold. At the NWPCA 2017 Annual Leadership Conference in Tucson, Arizona, I should be in a better position to discuss likely policy actions and the implications for the overall economy and for key segments of the economy. PC Since housing starts have been below the long-term trend demand for several years, the building pent-up demand will drive housing starts higher over the next few years. Lynn Michaelis is President of Strategic Economic Analysis, a company which assists business managers in thinking about the future. Although the primary focus of his firm is housing and wood products, the company stays current on overall economic activities in the USA and globally. Lynn may be reached at lmichaelis@getfea.com or 206-434-8102.