The U.S. Federal Reserve's emergency 50 basis point rate cut on Tuesday was not driven by last week's market capitulation, but it was taken into account, Cleveland Federal Reserve President Loretta Mester told CNBC.

Speaking to CNBC's "Squawk Box Europe" on Wednesday, Mester revealed that she supported the cut on the basis of fresh uncertainty over the medium-term outlook for the U.S. economy.

"The risks around that outlook had gone up significantly. There's still a lot of uncertainty about the course of the virus and what impact it'll have. We have already seen impacts in terms of travel and tourism, we're going to see a reduction in activity for the first half of the year. This was really in response to the economy and the outlook and the risks around the outlook," Mester said.

However, she acknowledged that the market rout had piqued the interest of Fed policymakers.

"You certainly have to take note when the markets are doing that. You don't respond to market volatility per se but if investors pull back as much as they were showing that they did, that also influences business sentiment and also consumer sentiment. There is a signaling in that market about the reevaluation of the outlook on the part of investors, consumers and businesses."