Fed’s Jefferson says economy slowing in “orderly” manner
2023.05.09 09:39
© Reuters. FILE PHOTO: Dr. Philip Nathan Jefferson of North Carolina speaks during a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., February 3, 2022. REUTERS/Ken Cedeno/Pool/File Photo
WASHINGTON (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.
