NBC News — Are you American? Is the most British thing about you that you can recite entire scenes from “Downton Abbey”? Are you befuddled by the Brexit?
Here are four things Yanks should know about the United Kingdom’s vote to leave the European Union.
Your Favorite British Tea May Get Cheaper (and So May Other Imports) Do you like to drink popular British teas PG Tips or Twinings? You could be about to save. “The falling pound will drive down the cost of goods Americans import from the U.K.,” said Greg McBride, Bankrate.com’s chief financial analyst.
What About Interest Rates? Federal Reserve Chair Janet Yellen cited Brexit last week as a reason for not increasing U.S. interest rates.
So because of Brexit, you won’t soon be earning any higher rates of return on your savings accounts, but you also won’t be paying higher rates on credit card debt, or home or car loans.
“This is also considered by the Fed to be a wrench in the efforts of the U.S. economy to get back on course. It may slow growth. It will most certainly result in interest rates staying lower longer,” said NBC News financial contributor Jean Chatzky.
Don’t Panic With Your Portfolio. Global markets plunged on the news, with the Dow down 2.5 percent in early trading, in part because investors expected a “stay” vote, said McBride. Small investors with the stomach, however, can suddenly take advantage of a “Brexit discount” in stocks.
“Since nothing will change right away, a market overreaction presents an attractive buying opportunity,” said McBride.
“The markets hate uncertainty and much about this is uncertain — exactly how this will play out, David Cameron’s exit. The markets will be down big. Don’t panic. Anything that did not belong in stocks to begin with should be sold. But otherwise stay the course,” said Chatzky.