US economy to be affected negatively from Brexit – Danske Bank

Research Team at Danske Bank, suggests that in the US the focus in the coming months is on how the economy is affected by the UK ‘leave’ vote.

Key Quotes

“We expect the US economy to be affected negatively, but the magnitude and duration of the negative shock is unknown and just what we need find out over the next 3-6 months. Hence, all data releases referring to the period before the UK referendum will not be as important as they would otherwise have been.

Our main scenario is that the Fed will stay on hold for the next 12 months, with the first hike in June 2017. This will give them time to see the effects on the US economy of the UK ‘leave’ vote. The effects on the US economy will mainly be lower business investments and lower export growth, as we think private consumption will be more or less unaffected. This will affect employment in manufacturing and construction negatively, but have a limited effect on service employment.