—— Recently, James Bullard, the chairman of the Federal Reserve St. Louis, said that Brexit would not have a lasting impact on the United States, and there is no reason to predict that the United States will fall into a recession.
U.S. have no long-term effects from Brexit
On July 12, James Bullard, a member of the Federal Open Market Committee (FOMC) and chairman of the Federal Reserve St. Louis, gave a public speech. He believed that Brexit would not have a lasting impact on the US economy.
“Now that the markets have had some chance to digest the move, I think the ultimate impact on the U.S. economy will be close to zero,” Bullard told reporters following a speech in St. Louis.
At present, the impact of Brexit on the United States is mainly reflected in the phenomenon that US Treasury yields have fallen to historical lows, indicating that many investment institutions have turned to the safe haven of US Treasuries in order to avoid possible risks in the global capital market.
Global safe-haven asset prices rise rapidly after Brexit
American economic policymakers are now paying more attention to the problems of the United States’ own economic growth, such as the emergence of the labor market in the second quarter of this year and the policy guidance needed after the subsequent moderate slowdown in the United States’ economic growth.
Fed officials including Bullard believe that the current tightening labor market in the United States may trigger significant inflation and lead to weak GDP growth.
Facing f hidden inflation risks, the Fed may raise interest rates slightly within the next year to adjust the market’s enthusiasm, but the overall policies will remain stable. Brad believes that the US benchmark interest rate, the Fed Fund Interest Rate, should be at 0.63%, which is approximately 25 basis points higher than the current one.
In fact, within one month after the outbreak of Brexit, a large number of capital inflows that may be considered for hedging in the U.S. capital market, whether it is the stock market or the bond market, have pushed up asset prices.
The hedging advantages of investing in U.S. real estate
The Brexit has already had a great negative impact on the commercial and residential real estate markets in the UK.
Therefore, more overseas real estate investors who are eager for stable returns have begun to turn their attention to the United States, which has caused substantial demand boosting real estate prices in some high-quality investment regions in the United States.
The performance of U.S. REITs has far surpassed the market in recent years
In addition to choosing heavy-asset allocation by purchasing residential properties in the United States and renting out to obtain continuous cash flow, retail investors can also choose REITs, real estate-related mutual funds, and private equity funds to conduct light -asset allocation for real estate. invest.
U.S. REIT representatives performed steadily in 2015
This article refers to The Wall Street Journal, Financial Times, Bloomberg, Market Watch, and some other media; the views expressed by James Brad, refer to the source Fed’s Bullard Says Brexit to Have ‘Close to Zero’ U.S. Impact.