MNI BRIEF: Fed's Mester Keeps Employment Outlook Despite Delta

Federal Reserve Bank of Cleveland President Loretta Mester expects U.S. employment and the overall workforce to continue rising over the rest of the year, despite restaurants and other "high-touch" service sector firms reporting a slowdown as the Delta variant surges.

"Certainly (Delta) is a downside risk to the outlook in terms of the activity. It's not influencing my overall view of the economy," she told reporters on a call Friday. "We'll see a downturn in growth in the fourth quarter but I don't think it's going to stall growth, and I expect employment to continue to rise over the rest of the year," she added.

Mester repeated her view that it would be appropriate to begin tapering some time this year and to wind up purchases over the first half of 2022. "We've met both sides of the substantial further progress bar, and my view is not changing on the August employment report."