Fed’s Mester says U.S. economy to overcome ‘soft patch’

Thomson ReutersCleveland Fed President Loretta Mester takes part in a panel convened to speak about the health of the U.S. economy in New York

NEW YORK (Reuters) – The U.S. economy remains sound and will overcome recent market turbulence, allowing the Federal Reserve to continue tightening its monetary policy as planned, a top Fed official said on Thursday.

Cleveland Fed President Loretta Mester said that while the global selloff in stocks and oil poses risks, she is not about to cut her expectations of continued U.S. economic growth and labor market improvement.

“Solid” jobs and income growth “suggest that underlying U.S. economic fundamentals remain sound,” Mester said at an Market News International conference, adding inflation should rise even if it takes a bit longer than planned.

“Until we see further evidence to the contrary, my expectation is that the U.S. economy will work through the latest episode of market turbulence and soft patch to regain its footing for moderate growth, even as the energy and manufacturing sectors remain challenged,” she added.

(Reporting by Jonathan Spicer; Editing by Diane Craft)

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