By: Shmuel Shayowitz

A husband and wife are getting ready for bed. The wife puts on her sleep mask, rolls over, and says, “good night!” Her husband pops out of bed and stands staring at himself in the full-length mirror. “What’s the matter with you?” she says. Come to sleep already.” He turns to her and says, “I am so depressed. Look at me: All I see is a receding hairline, a growing gut, wrinkles under my eyes, and whatever hair I have left is grey.” “Honey, please tell me something positive, something encouraging, so I can go to sleep.” She thinks for a moment and says, “Well, the good news is your vision is still 20/20.”

The Game of Predictions

Can someone predict with certainty the outcome of a sports game? I would think not, but the sports betting industry is close to $100 billion as of 2022. So many things can slightly alter the trajectory of an outcome that predicting what will happen is futile. That said, based on my experiences and much analysis from veterans that I have been following for decades, I thought I would give it a shot.

Inflation and The Fed

We are still hearing the roar of high inflation. Certainly, those at the Federal Reserve think more needs to be done to curb inflation. I predict the next three inflation readings will show improvement because we are comparing them to December 2021 and January and February 2022 readings. Despite what will be improved numbers, Fed officials are committed to maintaining a “restrictive” monetary policy stance until the data conclusively proves that inflation is under control. As usual, they will go too far, for too long.

Rate Hikes or Rate Cuts

Based on historical experience, Fed members have cautioned against prematurely loosening monetary policy. To me, this means that they will definitely not be cutting rates in 2023, as some speculate. The question is whether we will still see a 25-50 basis point increase this year, which I, unfortunately, think will happen. I hope that, at worst, they do one more hike in February and then stop with the rate increases. Consumers need a reprieve from the massive hikes in 2022.

Debt and Savings

If you haven’t seen charts of the current “credit card and other revolving debts,” you should take a look. After dropping significantly in 2020 because of COVID stimulus money, consumer debt is now off the charts. We are breaking records, surpassing the excess highs of 2008-2009. At the same time, the average savings rate for U.S. households is at record lows. Simply put, despite the Fed’s effort to get people to stop spending to curb inflation, people are borrowing to continue living the lifestyles they have grown accustomed to. Unfortunately, this will only be exasperated in 2023, and I urge people to reevaluate their budgets and start saving.


International Monetary Fund’s (IMF) chief Kristalina Georgieva has warned that One-third of the world economy is expected to be in recession in 2023. It is unclear whether she thinks the United States will avoid a recession. Still, she nevertheless cautions, even for countries that are not in recession, “It would feel like a recession for hundreds of millions of people.” The fact that there are those who don’t think we will see a recession in the U.S. in 2023 is mindboggling. From past experience, it could take a year or more before a formal recession is confirmed. If we aren’t in one already, I am sure it will be here imminently.

Mortgage Rates and Housing

Many want to know what 2023 will bring about for mortgage rates and housing. For that, please tune in next week for the conclusion of my predictions. On that note, if you want to learn more about how inflation, rate hikes, and an impending recession impact residential housing & real estate, join my webinar by visiting www.approvedfunding.com/webinar2023.

Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at Shmuel@approvedfunding.com.

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