Newsroom
June 24, 2016
UK votes to leave EU, interest rate hike in U.S. likely delayed
NAFCU Chief Economist and Director of Research Curt Long noted that the United Kingdom's "Brexit" referendum vote Thursday to leave the European Union will likely further delay an interest rate hike in the U.S.
"For the U.S. economy, Brexit will at the very least lead to increased volatility in financial markets," said Long. "Fed action is likely on hold until the fourth quarter at the earliest. As for credit unions, they should prepare for the present interest rate environment to persist for some time as normalization is bound to proceed on an even more gradual path than the Fed has previously indicated.
"Credit unions are also likely to see a repeat of the second half of last year when market volatility led to a surge in share growth," he continued.
Long's take on the Brexit's implications was also cited by USA Today, U.S. News & World Report, Bloomberg and others.
The Federal Reserve said it is carefully monitoring global financial markets and is prepared to provide dollar liquidity in response to the vote.
"The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the U.K. referendum on membership in the European Union," the Fed said in a statement Friday. "The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."
Voters in the U.K. voted 52-48 percent to leave the EU. After the vote, U.K. Prime Minister David Cameron said he would resign in October.
"For the U.S. economy, Brexit will at the very least lead to increased volatility in financial markets," said Long. "Fed action is likely on hold until the fourth quarter at the earliest. As for credit unions, they should prepare for the present interest rate environment to persist for some time as normalization is bound to proceed on an even more gradual path than the Fed has previously indicated.
"Credit unions are also likely to see a repeat of the second half of last year when market volatility led to a surge in share growth," he continued.
Long's take on the Brexit's implications was also cited by USA Today, U.S. News & World Report, Bloomberg and others.
The Federal Reserve said it is carefully monitoring global financial markets and is prepared to provide dollar liquidity in response to the vote.
"The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the U.K. referendum on membership in the European Union," the Fed said in a statement Friday. "The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."
Voters in the U.K. voted 52-48 percent to leave the EU. After the vote, U.K. Prime Minister David Cameron said he would resign in October.
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