After Brexit Vote, U.S. Economy To Reflect Uncertainty About What's Next

Jun 24, 2016
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DAVID GREENE, HOST:

We woke up to some pretty stunning news this morning. Voters in the United Kingdom have decided to leave the European Union. This is a new reality the next U.S. president will be dealing with. Donald Trump said this vote is fantastic, and that U.K. citizens have taken back their country.

A more subdued response from Hillary Clinton, she said she respects this vote and that the priority right now is making sure the economic uncertainty from this vote doesn't hurt Americans. And let's talk about that with NPR economic correspondent John Ydstie who's in studio. Good morning, John.

JOHN YDSTIE, BYLINE: Hi, David.

GREENE: So some reaction already from Wall Street. What's happening?

YDSTIE: Well, the Dow opened down sharply as expected, down about 500 points, around 3 percent. But it's bounced back a bit. It's now down around 375 points, so, you know, it's not a rout. Selling has been - there's been a lot of selling, but it's been orderly.

GREENE: And we'll be watching those markets obviously as the hours and days go on. What about sort of long term, John? I mean, Hillary Clinton referring to potential economic uncertainties that could affect people in this country, Donald Trump sort of attaching the movement that has helped give him support to the movement in Britain - but when we look at the economy, I mean, how tied is the U.S. economy to whatever the repercussions are in Europe and in the U.K.?

YDSTIE: Well, I think there are going to be some repercussions for the U.S. economy, but they're not going to be as dramatic as they might be in the U.K. and the EU. One thing that we've seen today is the U.S. dollar has - is up sharply. That means that the U.S. exports are going to be less competitive, more expensive. And so our growth could be hurt by that.

But I think probably we're going to be more affected indirectly because of uncertainty around, you know, is Britain the only one who's going to leave the EU? What's going to happen there? All that uncertainty makes businesses less interested in hiring and investing. And that kind of behavior is bad for growth, and I think - so we'll see slower global growth. And that's going to impact on the U.S. economy as well.

GREENE: OK. That's NPR economics correspondent John Ydstie. John, thanks a lot.

YDSTIE: You're welcome, David. Transcript provided by NPR, Copyright NPR.