Brexit fallout may have knock-on effects for the US economy - MUFG

Lee Hardman, Currency Analyst at MUFG, notes that the Fed Governor Powell spoke overnight warning that the Brexit fallout has boosted global risks and may have knock-on effects for the US economy and monetary policy, although cautioned it was still too soon to jump to conclusions.

Key Quotes

“He stated that “global risks have now shifted even further to the downside…the Brexit vote has the potential to create new headwinds for economies around the word”. He also expressed concern that the recent slowdown in US employment growth was worrisome. It supports our view that the Fed is now unlikely to raise rates until December at the earliest if at all this year. The more dovish outlook for Fed policy is helping to dampen upside for the US dollar following the Brexit vote.”