Fed Vice Chair Stays Cool on Brexit Effect

Federal Reserve Vice Chairman Stanley Fischer is bucking the trend to make predictions on exactly how the U.K.’s Brexit vote will affect the American economy. While early declines in mortgage interest rates have caused some to speculate on the Brexit effect, Fischer is taking a formal wait-and-see stance.

Fischer appeared on CNBC's “Squawk on the Street” Friday to say that the fallout will have a much greater direct effect on the European market than it will on the U.S. market.

"It clearly is a huge event for the U.K., and it's an important event for Europe,” he said during the interview. "Our direct trade with Britain is not going to make a huge difference to us, but there are a lot of things that will follow from Brexit for Europe, for the United Kingdom, and those are the things we'll have to be thinking about," he said.

Part of the reason to wait to make any judgments lies in the fact that exit negotiations for Britain could take a long time, during which other member countries might decide to follow the U.K’s lead and leave the E.U.

"When it's something that is going to go on and unwind over the course of time, it's much harder," he said.

Fischer was inscrutable about how the Fed sees the Brexit ripple here, saying only that by the time of their next meeting on July 26 and 27, the Fed’s board of governors will have a lot more information than they do barely a week since the vote.

The bigger picture, Fischer said, was that many facets of the U.S. economy will have to play out with any Brexit fallout.

"As we consider the effects of Brexit, we've got to put that effect on the U.S. together with what else is going on in the U.S. economy," he said. "Most of the incoming data look good now."