Fed's Mester: stock market declines will not harm US economy

Loretta Mester, head of the Cleveland Fed, made a speech late on Thursday where she highlighted that the current declines in equities that are rocking bourses around the globe shouldn't have a negative impact on the US economy.

Key highlights

The Fed's Mester, one of the more hawkish members of the US Federal Reserve's voting committee, noted that the recent rout in equities is far from causing significant repercussions within the US domestic economy, claiming that the current losses seen on major US indexes aren't severe enough to damage domestic business/consumer spending.

“While a deeper and more persistent drop in equity markets could dash confidence and lead to a significant pullback in risk-taking and spending, we are far from this scenario... Similar to the swings in the market we saw earlier this year, the movements of late do not seem to be signaling that investors are becoming overly pessimistic." - Fed's Mester