Fed's Barr says policy rate is only modestly restrictive

Oct 9 (Reuters) - Federal Reserve Governor Michael Barr on Thursday said that while the Fed's current policy rate is well above his estimate of long-run neutral, it is not actually delivering that much of a brake to economic growth.

"If I were to take my long run estimate, I would say it was quite restrictive," Barr said, adding the long-run neutral rate, which is affected by long-term structural changes, is not the right benchmark for how the policy rate is affecting the economy currently.

"Given the way in which the economy is being affected by supply and demand shocks, given what's going on in financial markets and in financial conditions, given what's going on in the labor market, given what's going on with inflation ... I'd say it's modestly restrictive."