Barkin: Rate cuts unlikely to revive business investment


DANVILLE, Va. (Reuters) – The Fed’s rate cuts this year may not do much to revive business investment driven lower by an uncertain business climate, Richmond Federal Reserve bank president Thomas Barkin said on Tuesday.

Weak business investment has left the U.S. recovery heavily reliant on consumer spending, but lowering short term interest rates by three quarters of a percentage point, as the Fed has done this year, “does not make a big difference in investment,” Barkin said. The decline in investment growth “has to do with the climate for business…You could include regulation, geopolitical challenges…It is hard to make a decision.”

Reporting by Howard Schneider; Editing by Chizu Nomiyama

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