(Adds further detail)
WASHINGTON, May 9 (Reuters) - The U.S. economy is
slowing in an "orderly fashion" that should allow inflation to
decline even as growth continues, Fed Governor Philip Jefferson
said on Tuesday.
"The economy has started to slow in an orderly fashion...I
am of the view that inflation will start to come down and the
economy will have the opportunity to continue to expand,"
Jefferson said in comments to the Atlanta Black Chambers
business group.
Jefferson did not comment on his current view of Fed
interest rate policy, with the federal funds rate currently set
in a range, between 5% and 5.25%, that many of his colleagues
have said should be adequate to return inflation to the Fed's 2%
target. It is currently more than twice that.
But his remarks did indicate hope for a "soft landing" in
which inflation cools without a dramatic drop in economic
activity.
Jefferson said that the recent tightening of credit
standards by banks, reflected in a Fed survey released on
Monday, was "typical" for where the U.S. is in the economic
cycle and a "natural part" of the Fed's monetary tightening.
(Reporting by Howard Schneider)
