The Federal Reserve is paying attention to growth concerns from the stock markets but is also open to the possibility that the economy has some more upside, Cleveland Fed President Loretta Mester told CNBC on Jan. 4.

Mester, who voted for the Fed's four rate hikes in 2018, flagged several headlines that have been roiling the stock markets in recent days, including slower growth in China and weaker-than-expected U.S. manufacturing activity.

The markets are "putting a lot of emphasis on the downside risks" to the economy, Mester said. But the Fed is trying to calibrate monetary policy to factor in the possibility that inflation and economic data may come in stronger than officials expect, she added.

"I don't think we're ahead of the curve. I don't think we're behind the curve," Mester told CNBC. "I think we're in a good spot, and now it's just really assessing the incoming information that we get on where the economy is, what the risks look like going forward."

Fed officials have penciled in two rate hikes for 2019, though investors are growing increasingly doubtful on whether the central bank will pull the trigger on any hikes.

Mester said "one or two rate hikes is about where we're seeing the economy now," and policy decisions will depend on what the incoming data show.

She also said the Fed is "in the ranges of estimates of neutral" interest rates, where the Fed would neither be spurring economic growth nor hindering it, and the economy will "tell us whether we're at neutral or not" in the coming months.

"If we don't see inflation picking up and we see the labor market staying reasonably strong ... then that may tell us we're at neutral," she said. "But if we see inflation picking up, then we're perhaps a little stimulative on the monetary policy side."

Mester, who will not vote on monetary policy this year, spoke shortly before the release of the U.S. jobs report, which showed nonfarm payroll employment grew by 312,000 in December 2018.