Cleveland Fed President Loretta Mester said yesterday that recent stock market slump is just “a risk” to the economy outlook. The “fundamentals of the economy” are not affected at this point. And it doesn’t change her expectations for 3% growth this year and a little bit less next. She added the the underlying economy of the US is “strong” and there is no signs of a pending recession.
Though, she acknowledged that “prolonged downturn in the market and a pullback in risk across the board with a lowering of credit extension” would have an effect on economic data. And Fed is going to monitor the developments.
