As expected by many international experts, the Brexit referendum results have had a serious impact on many of those international processes. According to Bloomberg, this is going to be the key reason for the Federal Reserve to delay another interest rate cut until 2018.
They say there are several arguments to back this assumption. It is interesting to note that some experts are even talking about the possibility of the Fed slightly cutting the rate in the near future instead of raising it once again. In reality, the Fed may well cut the key interest rate because the Brexit has only increased the degree of uncertainty in global financial markets. And the tendency is expected to continue in the near future. The changes may even be radical for the entire global financial system.
That’s why the experts came to a conclusion, which says that there is no point in expecting another interest rate hike in the USA in the near future, at least early 2018. It should be noted that they based their assumption on several factors, including the current price on long-term EURUSD futures. Simply put, today these derivatives mean USD bank deposits outside of the USA. After the UK announced the results of the Brexit referendum, the price of those futures skyrocketed instantly on CME.
First off, this factor leads us to believe that major investors are seriously concerned about the Fed’s interest rate, Masterforex-V Academy experts say. Back in May 2016, the international expert community was 80% sure that the Fed is going to implement another interest rate hike somewhere in September 2016. To date, the probability is under 5%. Is it true? Well, we’ll have to wait and see.
