The credit outlook for the structured finance market in Canada and the United States appears stable heading into the new year but there are risks on the horizon, says Fitch Ratings in a report published Friday.

The stable outlook is currently supported by the positive macro environment in the U.S, according to the report. Fitch expects gross domestic product growth to average approximately 2.5% in the U.S. over the next 18 months, “as investment gathers pace, global demand continues to expand and fiscal policy remains modestly expansionary.”

Interest rates are expected to head higher on both sides of the border next year. In the U.S., rate hikes are seen as “manageable,” the report says. However, the prospect of rising rates is risky in Canada, the report says, “given elevated consumer indebtedness, Canadian asset performance remains much more vulnerable to expected rate increases.”

Fiscal policy also represents a risk for the sector, particularly in the U.S., the report warns. “Tax policy changes will add some short-term economic momentum but also create downside risks for structured finance depending on their details and implementation,” it says.

Finally, the report sees possible secular pressures for the commercial real estate sector, which, it says, is facing “growing disruption driven by technology advancements, tenant shifts and demographics.”

In particular, the rise of e-commerce is creating negative pressure in the retail sector, which will in turn affect regional malls, the report says. “This dynamic will continue to drive rating activity in 2018.”