Shock/disbelief, denial, bargaining, guilt, anger, depression and fi nally acceptance/ hope – hard to say which stage of grief Bremain and more than a few Brexit supporters are experiencing a few days removed from the referendum that roiled world markets. Bond, currency, commodities, equity markets are unsettled and it is just another setback to the already sluggish global growth trajectory. Although preliminary reports by most economists and analysts suggests that short-term chaos will give way to long-term calm, it is hard to be convinced that shaken business and consumer confi dence in this interconnected world will not have ripple effects. The U.S. economy is unlikely to be significantly impacted by the referendum results, but the Fed is not taking any chances. Any talk of a hike in the next few months has been effectively tabled, though a stable domestic economic performance could force its hand. Economic indicators will only begin to capture post-Brexit angst and anxiety for investors, businesses and consumers in the coming weeks and months. This will be further clouded by other geopolitical events and ongoing polarizing election campaigning not just here in the States but across the world. The U.S. economy has emerged stronger from prior financial market shocks in recent years and is expected to shrug this one off too. However, the risk of contagion is clearly heightened at this stage of the economic recovery.
Source : CBRE Global Investors