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WASHINGTON — Evidence in favor of a “soft landing” for the U.S. economy, in which inflation declines without major job losses, appears to be growing, Federal Reserve Vice Chair Lael Brainard said on Thursday in remarks that excluded any explicit policy preference for the U.S. central bank’s upcoming meeting but noted signs of slowing growth.

“Inflation has been declining over the past several months against a backdrop of moderate growth,” Brainard said in prepared remarks for a speech that noted a “significant weakening in the manufacturing sector,” a moderation in consumer spending, and other data pointing to now “subdued growth” in 2023.

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In addition, she said the full impact of last year’s aggressive Fed interest rate increases has yet to be felt. The U.S. central bank raised its benchmark overnight interest rate by 4.25 percentage points in 2022 to the current 4.25%-4.50% range to fight inflation that climbed to 40-year highs.

“It is likely that the full effect on demand, employment, and inflation of the cumulative tightening that is in the pipeline still lies ahead,” Brainard said in the remarks for a speech at the University of Chicago’s Booth School of Business.

At the same time, Brainard pointed to trends in prices, wages and margins that indicated inflation, which by the Fed’s preferred measure is running at almost three times its 2% target, was slowing and could well continue doing so.

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The U.S. unemployment rate, meanwhile, is at a low 3.5%.

“It remains possible that a continued moderation in aggregate demand could facilitate continued easing in the labor market and reduction in inflation without a significant loss of employment,” Brainard said.

She was speaking just before the start on Saturday of an official “blackout” period that will restrict Fed policymakers from making further comments ahead of the Jan. 31-Feb. 1 meeting.

As the final pre-meeting word of a senior Fed official, Brainard gave little direct guidance about the outcome of that session, indicating the central bank would continue to “move the policy rate closer to a sufficiently restrictive level” with further rate increases, but not saying if she favored moving by only a quarter of a percentage point at the upcoming meeting, as investors currently expect.

Even as the Fed parses the progress it has made on inflation, she said it would “stay the course.”

“Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 percent on a sustained basis,” Brainard said. (Reporting by Howard Schneider; Editing by Paul Simao)