The ink wasn’t dry on Fannie Mae’s October economic forecast when the month’s Consumer Price Index (CPI) was published showing an inflation rate two-tenths higher than the company’s economists had predicted. Fannie Mae’s November forecast now says their already upwardly revised Q4 2021 forecasts of 6.2 and 4.6 percent for annual topline and core CPI respectively, are likely too low and they think a longer lasting inflationary period is now more likely. This leads them to conclude the Federal Reserve will stop purchasing securities for their portfolio by mid-year and begin raising the Federal Funds rate target in the fourth quarter of 2022. They continue to expect 4.8 percent growth this year, 3.7 percent in 2022, and in their first forecast for 2023, they expect a GDP of 2.1 percent and an unemployment rate of 3.7 percent. They also expect both the CPI and the core level to be near 3.0 percent by the end of 2023 and that the Fed will hike their funds rate in 25-basis point increments starting in the fourth quarter of next year. They see little possibility that those increases will start while the Fed is still tapering security purchases but are open to the possibility that tapering will be accelerated.