NEW YORK (TheStreet) -- The global reaction to the Brexit vote of plunging markets across the world including the U.S., is "entirely rational," BlackRock managing director Richard Turnill said on CNBC's "Power Lunch" Friday.

"When I look at the market reaction, it is entirely rational. There is no evidence of panic selling. This seems a rational move to a shock event," Turnill stated.

The reaction is a direct result of an increase in political risk premium, which is going to take "months, years potentially, to resolve," which in turn creates a risk premium onto all assets. here will be downgrades to growth forecasts in the U.K., and Europe in particular, he explained.

CNBC's Michelle Caruso-Cabrera asked Turnill what American dollar investors who piled into European equities should do now.

Remember that the European stock market is a "very global stock market," Turnill noted, with more than 50% of European companies' revenues and 70% of their earnings coming from outside of Europe.

"So I think you've got to separate what this means for the economy versus what it means for the stock market. But certainly this election result poses significant challenges to many domestic assets here in the U.K. and across Europe," he commented.

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The banking sector which has been under threat for awhile with its "extraordinarily" low yield levels will only be further pressured after the U.K.'s vote to leave the European Union (E.U.), Turnill continued.

"And those pressures are not going to go away," he added.

What implications would a possible Federal Reserve interest rate cut have on asset allocation? Caruso-Cabrera inquired, as the station's Steve Liesman reported earlier that there is a slight chance that the Fed will cut rates in September.

"I do think the events here in the U.K. have their main economic impact on U.K. and European assets. But we certainly are in a period where U.S. rates are going to remain low for much longer than previously anticipated," Turnill replied.

A U.K. rate cut, on the other hand, is highly probable, he predicted.

"Increasingly, the onus is not on the central banks to support the economy anymore, it's onto the politicians, onto the fiscal policy, structural policy to support growth," Turnill stated.

The U.S. markets are continuing to spiral downward to record lows today. The Dow Jones is falling by around 566 points, the S&P 500 is lower by about 70 points and the NASDAQ is tanking by around 196 points late this afternoon.