The decision by voters in Britain to leave the European Union is spreading like an economic tsunami across the Atlantic, and while America may not face drowning, there are already negative aspects showing.
The Federal Reserve Board has decided to wait for more data before changing its key interest rate from the target range of a quarter to one-half of one percent.
The minutes of its June meeting, released today, said board members agreed it would be "prudent" to wait for additional labor market data, as well as the effect of the UK Brexit vote on the global economy.
Already, many in Britain are having second thoughts about leaving the EU, and some unintended consequences are showing up. One is the effect on the sports, especially the Premier League of soccer, whose teams regularly sign athletes from other European countries. If the UK leaves the EU, athletes will no longer have freedom of movement from their home countries to Britain.
In addition, small business owners in Britain now realize that they will lose subsidies from the Brussels headquarters of the EU. Proponents of leaving had claimed that the UK lost money monthly because of an imbalance of trade. Since the vote, however, it turns out that the claim was false, and those who made it have stepped back and given up responsibility for resolving any problems that leaving the EU would present.
Meanwhile, the Fed in Washington continued its watch and wait stance, even as it had hoped to act this summer when the economy was expected to continue and hasten its recovery pace.
As it is, Gross Domestic Product, the usual measure of economic health, has been growing moderately, while the unemployment rate has held below 5 percent. In the first three months of this year, GDP grew at the rate of 1.1 percent, down from the 1.4 percent rate in the fourth quarter of 2015.
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