GDP Growth – 2.5%
This is based upon WalletHub’s compilations of projections from 10 large investment banks, the Congressional Budget Office and the Federal Open Markets committee.
Unemployment Rate – 3.5%
The Federal Reserve and Wells Fargo Bank agree that the unemployment rate will be 3.5% in 2019. The Bank of America and Goldman Sachs predict a 3.4% unemployment rate. WalletHub is going with the higher rate. This prediction is based upon the overall strength of the economy, job creation and wages slightly increasing. Wallet Hub said, “If you are looking for a full-time job, 2019 may just be your lucky year.”
S&P Will Top 3,000
Morgan Stanley predicts the stock market to hit 2,750 in 2019 while Credit Suisse predicts the S&P above 2,250 in 2019. This is a most difficult prediction for any one to make, even experts, as there are many, many elements about which we, or anyone, know nothing.
What we do know is that for every quarter-point increase in interest rates made by the Federal Reserve, it costs those with debt an additional $1.6B in interest per year. Delinquency rates are already creeping up from record low interest rates as debt levels are reaching record highs of $1.1T.
According to WalletHub, “Further federal rate hikes could be the straw that breaks the camel’s bank, causing significant rise in defaults, a corresponding decrease in credit quality and stricter lending standards.
Home Sales Will Hit 5.5 Million
Having a home is a basic need in any financial environment. Housing data and analytical firms and industry economists believe that people will continue buying and selling homes in 2019.
Currently, nearly 90% of homeowners have fixed mortgage interest rates and 30-year mortgage terms.
According to Fariz Huseynov, associate professor of finance at North Dakota State University, “Mortgage availability will (continue) to grow, as long as long-term rates are not going to increase as much as short-term rates and (as long as) further increases will not be as quick or as steep. We will be much closer to a neutral-rate in mid-2019.”