Oil Prices Cloud Economic Outlook According to Fannie Mae's Economic & Mortgage Market Analysis Group

Consumer Uncertainty Hampers Demand for Housing

WASHINGTON, March 22, 2011 - The economy continues to show increasing signs of self-sustaining
momentum, however an unexpected jump in oil prices and the potential for
further tightening of fiscal policy suggest less economic momentum than
previously believed, according to the March 2011 Economic Outlook released
today by Fannie Mae's (OTC Bulletin Board: FNMA) Economics & Mortgage Market
Analysis Group. Projected economic growth for the year was lowered to 3.5
percent - down slightly from 3.7 percent in February 2011, but up from 2.7
percent annual growth in 2010.

The recent jump in oil prices and unpredictability of the magnitude and
duration of the oil price rise has injected additional uncertainty about the
prospects for consumer spending and economic growth for 2011 and 2012. "The
increase in oil prices has an impact on the economy, especially on the
consumer side," said Fannie Mae Chief Economist Doug Duncan. "The U.S.
consumes roughly seven billion barrels of oil each year, so every dollar
increase in the cost of energy translates into a $7 billion annual tax on
consumers, reducing their disposable income available for spending on other
goods and services."

Consumer uncertainty also continues to stifle demand for housing, keeping
the housing market on a bumpy road to recovery. "Our National Housing Survey
results during the last year have been very clear regarding consumer
uncertainty about the economic and housing environment," said Duncan. "This
uncertainty, coupled with the rise in oil prices, is precipitating reluctance
among people to take on large financial obligations such as borrowing money
to purchase a home."

Following completion of the March Economic Outlook, the events in Japan
unfolded and are still unfolding. This information was not included in
Commentary and Forecasts, but may have an impact on the forecast outlook.
Dimensions of the impact will be described in the April Economic Outlook
Commentary and reflected in the Forecast numbers.

For an audio synopsis of the March 2011 Economic Outlook, listen to the
podcast on the Economics & Mortgage Market Analysis
(www.fanniemae.com/media/economics/index.jhtml?p=Media&s=Economics+%26+Mortgage+Market+Analysis)
site at www.fanniemae.com. Visit the site to read the full March 2011
Economic Outlook, including the Economic Developments Commentary, Economic
Forecast, and Housing Forecast.

Also available via link from the Economic Developments Commentary is the
Multifamily Market Commentary by Kim Betancourt, Director, Multifamily
Economics and Market Research. The Commentary provides information on current
multifamily market conditions. The March 2011 Commentary explores renewed
interest in multifamily mortgages during 2010.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's
Economics & Mortgage Market Analysis (EMMA) 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 EMMA 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 EMMA 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.

Fannie Mae exists to expand affordable housing and bring global capital
to local communities in order to serve the U.S. housing market. Fannie Mae
has a federal charter and operates in America's secondary mortgage market to
enhance the liquidity of the mortgage market by providing funds to mortgage
bankers and other lenders so that they may lend to home buyers. Our job is to
help those who house America.

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Pete Bakel, Fannie Mae, +1-202-752-2034