Loretta Mester leaves the US GDP forecast unchanged

Director Loretta Mester of the Federal Reserve Bank of Cleveland holds on to her prospects for economic growth in the United States this year, despite the risks associated with the new corona virus. That is what the policy maker of the umbrella of US central banks told the Bloomberg news agency.

For the time being, Mester continues to assume a growth of around 2 percent in the US this year.

“I see the coronavirus primarily as a risk to that expectation. There may be an impact on the US economy in the first quarter, but I am not adjusting my forecasts downwards.” Fed Chairman Jerome Powell said earlier this week in the US Congress to closely monitor the corona virus situation.

The infectious disease can cause a headwind for the US economy due to, for example, supply chain disruptions and pressure on demand.

The pressure on the Fed to further lower interest rates may increase due to the negative impact of the virus fears on the US economy, after three interest rate cuts last year. In the financial markets, the expectation is growing that the Fed will come up with a new interest rate cut later this year.

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