Markets

Loretta Mester says consumers are holding up the economy, even as trade issues weigh it down

Key Points
  • The economy is still holding up well thanks to the strength of consumers, says Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland.
  • Trade and tariff issues continue to be headwinds for the economy, she said.
  • Mester said she is waiting for more information on the economy before taking a position on interest rates at the Fed's next meeting Oct. 30.
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Fed President Loretta Mester: Consumer side seems to be holding up

It's trade policy, not Fed policy, that's slowing economic growth, Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland, told CNBC on Friday.

"Global growth is slowing, trade policy has created uncertainty and tariffs have an impact as well," she said on Closing Bell. "Those factors really account for some of the slowdown we've seen abroad and into the manufacturing sector in the U.S. and also the export side of the U.S. economy."

Consumers, however, continue to maintain the economy's strength against slowing pressures, as evidenced by Friday's jobs report showing the unemployment rate at 3.5%.

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Cleveland Fed President Mester: Thought jobs report was 'pretty solid'

Mester called it a solid report but gave few hints as to how she's now leaning as the central bank is slated to announce another decision on its rates when it meets Oct. 30.

"I won't say today because I really think it's important we really look at the incoming information," she said.

She said she's watching for signs the consumer is weakening, but so far consumers are holding up well.

As for criticism from President Donald Trump, who has called the Fed's members "boneheads" for not lowering rates fast enough, Mester said the Fed sticks to its discussions about its dual mandate to keep inflation and employment at healthy levels.

"There's always challenges out there," she said, "and we have to look through it."