WASHINGTON, Feb 5 (Reuters) - The U.S. Federal Reserve is still leaning toward further rate cuts this year, although uncertainty about the impact of new Trump administration initiatives on things like tariffs, immigration and regulations will need to be better understood, Richmond Fed President Tom Barkin said on Wednesday.
Along with tariffs, there is "deregulation - where is it going to hit - immigration, energy policy, geopolitics. There is just a lot of uncertainty in the air," Barkin said on Bloomberg Television.
But with inflation expected to drop further this year and the economy continuing to grow, "I start with a baseline that is pretty favorable" to further cuts, Barkin said. "That is certainly the lean."
Barkin's comments reflect what's become a consensus view at a central bank that has decided to hold its interest rate policy steady while it awaits further data on jobs and inflation, and on the outcome of Trump administration policy initiatives that may be hard to anticipate.
In just a weekend, for example, President Donald Trump veered from 25% tariffs on major trading partners Mexico and Canada to a month-long delay some economists argue is likely to be extended after negotiations among the neighboring countries.
The current policy interest rate of 4.25% to 4.50% remains restrictive and thus should continue to lower inflation to the Fed's 2% target from current levels about half a point above that, Barkin said.
But "you want to wait and see," Barkin said, a sentiment shared this week by other Fed officials, including vice chair Philip Jefferson in remarks on Tuesday.
Reporting by Howard Schneider; Editing by Bernadette Baum and Mark Porter
