2007 Outlook: Don't Sweat Housing

2007 Outlook: Don't Sweat Housing

A top economist and market strategist at Citigroup both said Monday morning they did not think the housing slowdown is going to cause the economy to plunge into a recession or the stock market to fall into a tailspin in 2007.

Speaking at a breakfast for financial reporters at the company's headquarters in New York, Citigroup senior economist Steven Wieting said that concerns about a recession due to softness in the housing market are overdone.

In fact, Wieting said that if the housing market had not cooled this year, that would have presented a greater risk to the economy since it most likely would have led to increased inflation and probably more interest rate hikes from the Federal Reserve.

"Without the housing downturn, the economy would be overheating and there would be more inflation and tightening pressures," he said.

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