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RALEIGH, N.C. (Reuters) – The ongoing partial shutdown of the U.S. government could increase uncertainty surrounding the state of the economy and the direction of interest rates, Richmond Federal Reserve President Thomas Barkin said on Thursday.

Barkin told a news conference that while the shutdown may not have a huge impact on the economy directly, the longer it continues, it could begin to weaken business confidence and also affect the amount of economic data produced by federal agencies and available to the Fed as it seeks to evaluate whether to increase rates further.

The Fed has not quite reached a “neutral” interest rate that neither stimulates nor restricts the economy, but it is close and “patience is a virtue,” Barkin told reporters in Raleigh, N.C., joining colleagues whose similar remarks are seen suggesting a likely pause in rate hikes.

“The economy will tell us whether the time is right to go back to neutral.”

The remarks come as Fed policymakers have signaled a willingness to wait to deliver more rate hikes until they have a better handle on whether slowing global growth and financial market volatility will undercut an otherwise solid U.S. economic outlook.

Presidents of four of the 12 Fed regional banks on Wednesday said they wanted greater clarity on the state of the economy before extending the central bank’s rate hike campaign any further.

Barkin does not have a vote on the central bank’s monetary policy committee this year but participates in the Fed’s discussions. He said on Thursday that his contacts are worried about how long strong U.S. economic growth can continue.

U.S. President Donald Trump and Democratic congressional leaders are at loggerheads over funding for a border wall with Mexico and reopening the government.

Despite the uncertainty, Barkin said he expects growth to continue, though at a somewhat slower pace, and he forecast “trend” growth as only in the 1.9 percent range.

“But as we enter 2019, I hear a lot of concern,” Barkin said in remarks prepared for delivery to the Greater Raleigh Chamber of Commerce.

“Some is environmental, driven by trade, international economies or politics. Some is market driven, as volatility has increased and the yield curve has narrowed. Some is margin pressure. But overall, the question I hear most is, ‘How long can this growth continue?’”

Reporting by Trevor Hunnicutt; Editing by Chizu Nomiyama

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