Economic Forecast: July 2015

14.1 14.2 14.3 14.4 15.1 15.2 15.3 15.4 16.1 16.2 16.3 16.4 2014 2015 2016

National Income and Product Accounts (Chained 2009$)

Percent Change: Quarterly SAAR, Annual Q4/Q4

Gross Domestic Product -2.1 4.6 5.0 2.2 -0.2 2.8 3.1 2.9 2.5 2.4 2.3 2.4 2.4 2.1 2.4

Personal Consumption Expenditures 1.2 2.5 3.2 4.4 2.1 2.9 3.1 2.9 3.0 2.7 2.6 2.5 2.9 2.8 2.7

Residential Fixed Investment -5.3 8.8 3.2 3.8 6.5 8.6 7.9 9.2 7.9 6.2 7.8 7.3 2.5 8.1 7.3

Business Fixed Investment 1.6 9.7 8.9 4.7 -2.0 2.4 2.1 3.4 4.3 4.2 3.5 3.2 6.2 1.4 3.8

Government Consumption & Investment -0.8 1.7 4.4 -1.9 -0.6 1.8 0.6 0.1 0.7 0.7 0.9 0.9 0.8 0.5 0.8

Billions of Chained 2009$

Net Exports -447 -460 -431 -471 -548 -548 -530 -520 -528 -532 -549 -556 -453 -537 -541

Change in Business Inventories 35 85 82 80 100 95 89 85 72 63 64 62 71 92 65

Price Indices

Percent Change: Quarterly SAAR, Annual Q4/Q4

GDP Price Index 1.3 2.1 1.4 0.1 0.0 2.1 1.9 1.1 1.8 1.8 2.0 2.0 1.2 1.3 1.9

Consumer Price Index 2.1 2.4 1.2 -0.9 -3.1 2.8 2.3 1.3 2.1 2.2 2.2 2.0 1.2 0.8 2.1

Consumer Price Index (Quarterly YOY % Change, Annual YOY % Change) 1.4 2.1 1.8 1.2 -0.1 0.0 0.3 0.8 2.1 2.0 2.0 2.1 1.6 0.2 2.0

Consumer Price Index excl. Food & Energy 1.8 2.2 1.4 1.5 1.7 2.0 1.8 1.6 1.9 2.0 2.0 2.0 1.7 1.8 2.0

Consumer Price Index excl. Food & Energy (Quarterly YOY % Change, Annual YOY % Change) 1.6 1.9 1.8 1.7 1.7 1.6 1.7 1.8 1.8 1.8 1.9 2.0 1.7 1.7 1.9

Employment

Unemployment Rate (Percent) 6.6 6.2 6.1 5.7 5.6 5.4 5.2 5.1 5.1 5.0 5.0 5.0 6.2 5.3 5.0

Employment, Total Nonfarm Establishment Survey (Percent Change: Quarterly SAAR, Annual Q4/Q4) 1.6 2.3 2.2 2.5 2.2 1.7 1.8 1.4 1.1 1.0 1.2 1.1 2.1 1.8 1.1

Interest Rates (Percent)

Federal Funds Rate 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.3 0.5 0.7 0.9 0.1 0.1 0.6

1-Year Treasury Note Yield 0.1 0.1 0.1 0.1 0.2 0.3 0.4 0.6 0.7 0.9 1.1 1.3 0.1 0.4 1.0

10-Year Treasury Bond Yield 2.8 2.6 2.5 2.3 2.0 2.2 2.4 2.5 2.6 2.6 2.7 2.8 2.5 2.3 2.7

July 10, 2015

Note: Interest rate forecasts are based on rates from June 30, 2015.

Note: Unshaded areas denote actuals. Shaded areas denote forecasts.

Sources: Actuals: Bureau of Economic Analysis, Bureau of Labor Statistics, Federal Reserve Board. Forecasts: Fannie Mae Economic & Strategic Research (ESR) Group

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's ESR Group included in these materials should not be construed as indicating

Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend

on many factors. Although the ESR group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided

in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results.

The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views

of Fannie Mae or its management.

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