Federal Reserve officials downplayed concerns about the impactof geopolitical uncertainty on the U.S. economy amid flaringtensions with Iran, even as a record of the central bank's meetinglast month showed that downside risks remain on their minds.

"That's one of the great things about the U.S. economy, is itdoes have this resiliency to it," Cleveland Fed President LorettaMester said Friday in an interview on Bloomberg Television."Obviously we can't know what is going to happen in the Middle Eastat this point, and it adds to the uncertainty surrounding things,but fundamentally, the economy is sound."

Mester's comments, coming from the sidelines of the annualAmerican Economic Association meeting in San Diego, echoed those ofher Chicago Fed counterpart Charles Evans, who spoke earlier in aBloomberg TV interview.

Stocks fell Friday following news that the United States hadkilled a top Iranian general in an airstrike in Baghdad, escalatingtensions in the Middle East and sending oil prices soaring. In theU.S., a widely followed gauge of business activity in themanufacturing sector published Friday unexpectedly dropped to thelowest level since 2009, signaling a worsening contraction.

"We've found that the economy can continue to grow even whenmanufacturing is contracting just a little bit, so I'm hopeful thatwe've got a really resilient economy at the moment," Evanssaid.

The U.S. unemployment rate ticked down to 3.5 percent inNovember, matching a half-century low, and has spent most of thelast two years below 4 percent. Yet inflation remains under theFed's 2 percent target, as it's been throughout most of the lastdecade, a development that's confounded policymakers, who expecteda tighter job market to put more upward pressure on consumerprices.

Evans reiterated his call for keeping interest rates low forlong enough to drive inflation above the Fed's target. "I think atthis point in the cycle we really need to get inflation up to 2 percent, andabove 2 percent somewhat," he said.

Robert Kaplan, president of the Dallas Fed, said he's notlooking to adjust his forecast for economic growth in the UnitedStates in 2020 based either on disappointing manufacturing numbersfor December or the rising tensions between the U.S. and Iran.

Speaking in an interview in San Diego, Kaplan said themanufacturing data were "consistent with my outlook" for slowingglobal growth and sluggish business investment. Despite that, hestill expects strong U.S. consumer spending to drive 2 percent to2.25 percent growth this year.

While conceding that geopolitical tensions could hurt somefinancial markets, he took a measured view of the risks. "Arepricing of risk assets could be healthy," Kaplan said. "What Iwould watch for is a severe tightening in financial conditions,particularly the availability and cost of money." Kaplan also saidhe thought the Fed should hold rates steady through 2020. "That'ssubject to change, but I don't see any reason to change that yet,"he said.

Minutes of the Fed's December 10-11 meeting, released Friday,showed that officials view monetary policy as likely to remainappropriate "for a time" amid what they see as persistent downsiderisks.

Geopolitical threats are on that list, though the headwinds fromtrade tensions and a potential no-deal Brexit are judged to havereceded, while policymakers remain concerned about inflationrunning below their 2 percent target.

Officials left rates unchanged at the meeting, following threecuts in 2019, and signaled that policy will stay on hold through2020, keeping the central bank on the sidelines during a U.S.presidential election year.

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