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

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Fed's Barkin says watching growth, monitoring impact of last rate cut
FILE PHOTO: Federal Reserve Bank of Richmond President Thomas Barkin poses during a break at a Dallas Fed conference on technology in Dallas, Texas, U.S., May 23, 2019. REUTERS/Ann Saphir   -   Copyright  ANN SAPHIR(Reuters)
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By Jason Lange

WHITESULPHURSPRINGS, 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.

(Reporting by Jason Lange in White Sulphur Springs, West Virginia; Editing by Chizu Nomiyama)

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