Barring any significant spillover from the financial turmoil in peripheral European countries, the expansion abroad should continue. In that regard, I should note that renewed concerns about fiscal strains and banking-sector problems in the euro-area periphery have recently contributed to increased volatility in financial markets, but, to date, we have not seen a widespread pullback.
My outlook for the housing market and for commercial real estate is more cautious. A sustained recovery in income and jobs will be an important prerequisite for a recovery in the housing industry. But until the overhang of vacant homes is reduced significantly and home values begin to firm, new residential construction is likely to remain at low levels.