Fed's Mester says more stimulus needed to support fragile recovery

FILE PHOTO: Cleveland Federal Reserve Bank President Loretta Mester poses during an interview on the sidelines of the American Economic Association’s annual meeting in San Diego, California, U.S., January 3, 2020. REUTERS/ Ann Saphir/File Photo

(Reuters) - The U.S. economy has rebounded more strongly than expected since businesses began to re-open a few months ago, but the recovery is not broad-based or sustainable, Cleveland Federal Reserve Bank President Loretta Mester said Wednesday.

Many sectors, including travel and leisure and hospitality, will be slow to recover, Mester said. Monetary policy will need to remain accommodative for the next several years and more fiscal stimulus is needed to support the economy, she said.

“We’re still in a deep hole, regardless of the comeback we’ve seen,” Mester said during a virtual symposium. “We are recovering now, we see it, but it’s not broad based recovery yet and it’s not what I would call a sustainable recovery. I think it’s still fragile,”

Reporting by Jonnelle Marte; Editing by Chizu Nomiyama