EUR 45.60 For Business Accounts Only

Bremain Calm and Carry On

It is rare that markets and macro collide so spectacularly with politics as they did on Thursday's British referendum and Friday's subsequent selloff.  So what does this mean for the US and the Fed?    

• We do not expect Brexit to have much impact on the key drivers of US growth: consumer spending and housing. 
• Consequently we expect much of Friday's price action in yields and equity prices to retrace over coming weeks.  
• The one big exception?  The dollar is likely to retain much of its post-Brexit boost.  
• As for monetary policy, markets are overlooking the possibility of Fed rate hikes being ON the table again as soon as September.  
• The Fed has shown their policy stance is very fluid and it won't take much for it to flip again.