Company: CMA
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000028412-25-000108
Chunk: 45

Company: COMERICA INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1
Chunk 45
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 fiscal deficits, subdued housing market activity and a sluggish manufacturing sector. It also faces downside risks from geopolitical conflicts around the globe, including those involving Venezuela; the Israel-Hamas War and its spread to Yemen, Lebanon, and/or other parts of the Middle East; the Ukraine-Russia War and its effects in Europe; tensions between Taiwan and mainland China; threats from North Korea; and the possibility of other geopolitical shocks.

Domestically, the public debt, the possibility of a federal government shutdown and/or debt ceiling crisis, as well as broader issues surrounding the federal budgeting process and governance, may contribute to the possibility of a downgrade of the U.S. sovereign credit rating, potentially causing knock-on effects for the broader economy and financial system that could include a recession. 

The Federal Reserve rapidly tightened monetary policies during the recovery from the 2020 recession, including both increases in interest rates and reductions in the size of the central bank’s balance sheet, before beginning to reduce interest rates in 2024. However, the impacts interest rates have on the U.S. economy often are not immediate and take time to materialize after such changes in interest rates occur, and their substantial increase relative to the pre-pandemic period could still cause stress on capital-intensive sectors of the economy, including manufacturing, real estate, and highly leveraged corporate balance sheets.

Fiscal and industrial policies to support the growth of targeted industries could have unanticipated effects or change unexpectedly, causing volatility in the economic performance of these industries or other parts of the economy. These effects could impact the energy industry, manufacturing, construction, automotive manufacturing, information, and retailing, or potentially other industries. Prices of energy products and services, as well as other commodities, are subject to large and unanticipated fluctuations caused by changes to supply and demand conditions, which could directly or indirectly affect Comerica’s business and/or clients.

Rapid changes to the economy have impacted demand for residential and commercial real estate, including single-family and multifamily residential properties, as well as office, industrial, and retail commercial real estate properties. These changes have affected, and could continue to affect, the economic health of downtowns in major cities and other regions where economic activity has changed in recent years, and have impacted, and could continue to impact, real estate prices, construction activity, and sales. In addition, the weakness of regional real estate markets could affect municipal tax revenues and fiscal health, with knock-on effects to broader regional economies.

Adverse economic conditions related to a potential recession, including changes in inflation,