Brexit

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Here is Scott Sumner:

At this point (midnight) the global economy has been hit by a negative monetary shock, one of the biggest in years. Here’s what to watch tomorrow: 1. Does the crisis show signs of spreading to the PIIGS? 2. What do the world’s central banks do, especially the ECB and the BOJ? … If I read the fed funds futures correctly, they are now forecasting low rates for essentially forever. T-bond prices must be soaring. David Beckworth says we are a monetary superpower—well we are now a lot more super than even 3 hours ago. I’d emphasize that this is an almost purely a monetary shock—in real terms it makes little difference whether the UK is in or out of the EU (especially in places like the US and Japan). It’s monetary. That means the ultimate effect depends ENTIRELY on how the central banks react.

Brexit: the monetarists weigh in | FT Alphaville