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Fed's Barkin says watching growth, monitoring impact of last rate cut

EconomyAug 28, 2019 06:26PM ET
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© Reuters. Federal Reserve Bank of Richmond President Thomas Barkin poses during a break at a Dallas Fed conference on technology in Dallas

By Jason Lange

WHITE SULPHUR SPRINGS, W.V. (Reuters) - Richmond Federal Reserve President Thomas Barkin on Wednesday said he was closely watching developments around the outlook for economic growth but had yet to make up his mind on whether the economy needs another interest rate cut.

The Fed is expected to have an intense debate at its Sept. 17-18 policy meeting on whether to follow its July rate cut with another reduction in borrowing costs.

Barkin said he was not yet persuaded by the case that persistently weak inflation is a reason for cutting rates. But he said he was weighing a manufacturing slowdown, a fall in business investment and weakness in foreign economies.

"I am watching closely the growth part," Barkin told reporters in White Sulphur Springs, West Virginia.

Earlier, Barkin said the Fed was monitoring the impact of its move last month to cut interest rates.

"The national economy appears great," he told a gathering of business leaders.

"International economies are weaker, though, and uncertainty - particularly around trade - is elevated," he said.

Barkin did not say whether he supported further reductions in interest rates, which is a request U.S. President Donald Trump is regularly making of the independent central bank.

The Fed was divided in July over what to do with interest rates, with several policymakers opposed to cutting rates while a couple favored lowering them more aggressively than the 25 basis point reduction ultimately ordered, according to minutes of the Fed's last policy meeting.

Barkin does not have a vote on monetary policy this year but he participates in the Fed's policy discussions. He described July's interest rate cut as a "mid-cycle reduction" aimed at providing a little insurance for continued growth in the economy and a strong labor market.

"We are monitoring its impact," he said.

Fed's Barkin says watching growth, monitoring impact of last rate cut
 

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Comments (3)
Tom OKray
Tom OKray Aug 28, 2019 2:53PM ET
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The rate cut caused interest rates to fall, which is now why there is all this recession talk with inverted yield curves.
John Nichols
John Nichols Aug 28, 2019 2:30PM ET
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hey Andrew I have to disagree. I agree in principle but it has done quite a bit of polarizing this country between Haves and Have Nots. I don't particularly mean the last cut I mean all the cuts. When I look at the macro data I don't see much of an effect but nonetheless Central bankers will go back behind closed doors and do what they do best wishes come up with new fancy terms to describe the same situation over and over Ad nauseam. Cheers!
Andrew carson
Andrew carson Aug 28, 2019 12:30PM ET
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Let me save them some time. It didn't do anything.
 
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