BALTIMORE (Reuters) - The outlook for the U.S. economy in 2025 is positive with more upside than downside risk to growth despite uncertainty about the impact of trade and other policies that may be pursued by the incoming Trump administration, Richmond Fed President Thomas Barkin said on Friday.

"How economic policy uncertainty resolves will matter. But, with what we know today, I expect more upside than downside in terms of growth," Barkin said in comments to the Maryland Bankers Association, with potentially "more risk on the inflation side," if, for example, hiring strengthens.

With businesses optimistic and consumers still spending, Barkin said he felt the job market "is more likely to break toward hiring than toward firing."

Financial markets also seem to be more confident, with less uncertainty, an alignment with a Fed outlook for a slower pace of interest rate cuts in the coming year, and an acceptance that long-term interest rates "are unlikely to come down as much as some might have hoped," said Barkin, who will not be a voter this year on Fed interest rate policy.

The Fed cut its benchmark policy rate by a quarter of a percentage point at its December meeting, and lowered the rate a full percentage point over its final three meetings of 2024.

But with progress on inflation stalled and doubts about how trade, tax and immigration policy under incoming President Donald Trump may impact the economy, policymakers also projected the benchmark rate would fall only another half point this year.