New | Yellen cautions over exaggerating global impact of Brexit
Fed chief wary about US economic outlook and impact on further rate hikes
US Federal Reserve Chair Janet Yellen sought to avoid taking sides or being overly alarmist about the probable global fallout should Britain exit the European Union, even as she reiterated that such an event could have “significant economic repercussions.”
“I don’t want to overblow the likely impacts,” she told the US Senate Banking Committee on Tuesday, adding that she didn’t expect the US economy to fall into a recession if the UK leaves the EU.
UK citizens go to the polls on Thursday to decide whether to remain in the 28-nation bloc, with surveys suggesting the outcome is too close to call. Billionaire investor George Soros has warned the pound may slump more than 20 per cent against the dollar if supporters of a so-called Brexit prevail.
“I am not attempting to take a stand, they’re going to go to the polls,” Yellen said. “I’m simply saying the decision could have economic consequences that would be relevant to the US economic outlook that we need to monitor carefully.”
European Central Bank President Mario Draghi has been less shy, saying earlier this month that his institution’s view is that “the UK should remain in the European Union.” Bank of England Governor Mark Carney said a vote to leave the EU could cause a UK recession and would be ‘‘the biggest domestic risk to financial stability.” International Monetary Fund Managing Director Christine Lagarde has said that a UK exit would be “negative on all fronts.”