FOR IMMEDIATE RELEASE
Contact: Vicki Christner - CUNA Communications; 202-329-9950; email@example.com
Washington, DC (June 24, 2016) - Credit Union National Association (CUNA) economists released the following statement regarding the United Kingdom's vote to leave the European Union:
“Our outlook for credit union financial operations is essentially unchanged compared to our view prior to the Brexit vote. Credit union members are likely to be a bit more cautious initially and some credit unions will likely see above-normal flows into savings accounts. However, our view still calls for double-digit growth in credit union loans in 2016, healthy earnings and improving asset quality.
“In the short term, we will see pronounced volatility in the U.S. financial market, and a stronger dollar vis-à-vis the British pound and the Euro. The exit of the U.K. from the EU will have a negative effect on the U.S. economy. The U.K. is the 7th largest trading partner of the U.S. Last year our exports to and imports from the U.K. stood at $56.4 billion and $57.8 billion, respectively. That's 3.0% of our total trade. This year, U.S. exports to the U.K. totaled $18.4 billion and imports was $17.4 billion.
“The appreciation of the U.S. dollar affects our trade not only with the U.K. but also with other countries. In recent weeks we have seen a drop in the 10-year U.S. Treasury yield. As uncertainty in the EU area rises, demand for risk-free financial assets will rise causing yields to drop even lower. This morning the 10-year U.S. Treasury yield declined to 1.5%. We can expect an increase in financial inflows into the U.S. as a result of uncertainties in the Euro area.
“Brexit would cause the recent trend of depreciating dollar and rising oil prices-both a boon to the recovering U.S. economy-to reverse to some degree. Fortunately, U.S. economic fundamentals remain stable despite continued modest economic growth. CUNA economists believe Brexit will have little effect on U.S. economic fundamentals. The adverse short term effects, however, will eventually diminish as investors get a better handle of market reaction to the Brexit, and plans on U.K.'s disassociation with the E.U. becomes concrete, the process of which takes two years. In the medium to the long-term Brexit should benefit the U.S. economy assuming that our trade relations with the U.K. is enhanced.”