November 16, 2017 / 7:59 PM / a year ago

Mester: Fed forecast can't change before details of final tax bill known

Loretta Mester, president of the Federal Reserve Bank of Cleveland, speaks during an interview in Manhattan, New York, U.S., August 15, 2017. Picture taken August 15, 2017. REUTERS/Shannon Stapleton

WASHINGTON (Reuters) - Cleveland Federal Reserve Bank president Loretta Mester said the Fed should not begin changing its forecasts for the economy until a final tax bill emerges from Capitol Hill.

Policymakers have in recent weeks said some tax reform ideas have the potential to boost economic growth and productivity, while others could stoke inflation and prompt higher interest rates, and the economic impact will not become clear until a final bill is approved.

“We need to wait and see...Depending on the mix it takes a while for those changes to affect the economy,” Mester said in an interview with journalists at a conference here. Right now, she said, her support for continued gradual interest rate increases is based on “the underlying economic fundamentals that shows labor markets are very strong. I expect them to continue to be strong.”

Reporting by Howard SchneiderEditing by Chizu Nomiyama

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