Fed’s Barkin Says Economy Looks ‘Great’ But Uncertainty Elevated

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Federal Reserve Bank of Richmond President Thomas Barkin said he hasn’t decided whether he will support another cut in the benchmark policy rate next month as he looks for signs that the longest U.S. expansion on record may be faltering.

Talking with reporters on Thursday after a speech in West Virginia, Barkin said there were two cases for cutting rates: if inflation is too low, or growth is at risk.

“I am not persuaded on the inflation part,” he said. On growth he said the outlook was mixed, with strong consumption, weak business investment and weak manufacturing. Even so, his contacts in service industries in the Richmond Fed’s district suggests their business is robust even amid worries about downside risks stemming from uncertainties around trade policy.

“I am holding my decision until I get to the meeting,” said Barkin, who is not a voter this year on the rate-setting Federal Open Market Committee.

The Richmond Fed’s district spans Maryland, Virginia, North Carolina, South Carolina, most of West Virginia, and the District of Columbia.

In his speech, to an audience in White Sulphur Springs, Barkin said “the national economy appears great.”

“Unemployment is at 50-year lows, GDP growth is solid and consumers feel confident and are spending,” he said. “International economies are weaker, though, and uncertainty -- particularly around trade -- is elevated.”

To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.net

To contact the editors responsible for this story: Alister Bull at abull7@bloomberg.net, Jeff Kearns

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