July Fourth, the commemoration of American independence, is here. U.S. markets are closed but ironically, many investors will be looking overseas to Europe for news on Independence Day. At the center of a lot of investor and economist concerns will be, along with not burning the barbecue, a focus on how much (or if at all) the European Central Bank cuts its overnight lending rate by on Thursday. As Citi notes, if the ECB cuts its overnight lending rate by only 25 basis points, then investors are likely to "walk away disappointed and sell the euro."
So yes, we are a sovereign nation that has gained complete political independence. But it is important to note that we are more connected than ever to the global economy; we are leagues away from economic independence as worldwide developments have increasing significance on domestic markets. There used to be a pervasive saying that went something along the lines of "if America sneezes, Europe catches the cold." Well Europe has caught the cold and may very well infect the U.S.