The latest ULI Real Estate Economic Forecast is taking a more bullish view on the U.S. economy—at least for the remainder of this year. As compared with the fall survey, key indicators such as gross domestic product (GDP) growth, jobs, and the Consumer Property Price Index (CPPI) all trended higher. But that boost may be short lived with growth tapering in 2019 and 2020.

“The outlook for the U.S. going into 2018 and probably into 2019 is extremely strong. There is quite a lot of geopolitical noise, but I don’t expect that to impact the economy,” says Richard Barkham, global chief economist at CBRE. Barkham was one of several panelists who participated in a webinar presentation of the forecast on April 18.

The United States went into 2018 with good momentum along with optimism that tax reform would provide added benefit to corporate and personal spending. Another positive in the global economy is that China has not slowed its GDP growth as some had expected. “That’s a major locomotive on the global economy that is surprising on the upside,” says Barkham.

Beyond 2018, the outlook for both the economy and commercial real estate is for positive, but slower, growth. There is a possibility that the economy could be a little weaker than what the forecast suggests, adds Barkham. After ten years of exceptionally low interest rates, rates are expected to move higher over the next two years. The rising interest rate environment, especially in a global market where there is still quite a lot of debt, could present a big downside risk after mid- to late 2019, he says.

Ten-year Treasury rates that reached 2.4 percent at year-end 2017 are forecast to climb to 3.1 percent this year and 3.4 percent in 2019 and remain at that level in 2020. This new normal in the low to mid-single digits is still very good for business and for the commercial real estate market, says Diana Reid, executive vice president at PNC Financial Services. Yet some uncertainty remains on how markets that have lived with extremely low interest rates for the past decade will react to a rising interest rate environment.

Read more at Urban Land Magazine.