BALTIMORE (Reuters) - The U.S. economy will grow more slowly in 2019 compared to 2018, Richmond Federal Reserve President Thomas Barkin said on Friday, adding that he is hearing a lot about economic risks like trade policy and financial market volatility.
“I forecast growth to continue this year though at a somewhat slower pace,” Barkin said in prepared remarks for a bankers luncheon in Baltimore.
Barkin, who does not have a vote on monetary policy this year but participates in the Fed’s discussions, said the U.S. economy was coming off a strong year, with unemployment near a 49-year low and inflation roughly on target.
“But as we enter 2019, I hear a lot of concern,” Barkin said. “Some is environmental, driven by trade or politics. Some is market driven, as volatility has increased and the yield curve has narrowed.”
A slowdown in productivity growth suggests economic growth will likely average 1.9 percent over the long run, “far slower than today,” Barkin said.
The U.S. economy slowed in the third quarter but the pace was likely strong enough to keep growth on track to hit the Trump administration’s 3 percent target this year. However, momentum appears to have moderated further early in the fourth quarter.
Reporting by Jason Lange; Editing by Chizu Nomiyama