U.S. economy is slowing in an 'orderly' manner, Fed's Philip Jefferson says - The Globe and Mail

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 per cent and 5.25 per cent, that many of his colleagues have said should be adequate to return inflation to the Fed’s 2 per cent 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.

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U.S. economy is slowing in an 'orderly' manner, Fed's Philip Jefferson says - The Globe and Mail
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