Yellen: Brexit repercussions could be “significant”


US Federal Reserve chairwoman Janet Yellen says a UK vote to leave the EU at this month’s Brexit referendum could have “significant economic repercussions”.

Yellen delivered a “largely favourable” message on the US economy, despite Friday’s disappointing job numbers, but listed the global economic outlook as a key area of uncertainty.

“In the current environment of sluggish growth, low inflation, and already very accommodative monetary policy in many advanced economies, investor perceptions of and appetite for risk can change abruptly,” Yellen told the 

“One development that could shift investor sentiment is the upcoming referendum in the United Kingdom.”

The speech was Yellen’s last official appearance before the FOMC’s policy meeting next week, where a decision on whether the US raises rates will be decided.

The 38,000 jobs added to the economy were much below the 160,000 markets had expected, prompting speculation any chance of a June rate rise had been slashed.

Yellen described the report as “disappointing” but pointed to other positive indicators pointing to “significant job gains, the unemployment rate declining below 5 percent, rising household incomes, and tentative signs of faster wage growth”.

“Although this recent labor market report was, on balance, concerning, let me emphasize that one should never attach too much significance to any single monthly report,” Yellen says.

Yellen concluded “further gradual increases in the federal funds rate will probably be appropriate to best promote the FOMC’s goals of maximum employment and price stability”, but added that monetary policy was “not on a preset course”.