It is a caution that goes far beyond the credit tightening of the last year that the banks have often attributed to Government regulators.

Economists, meanwhile, emphasized that the economy was strong enough to accommodate the series of credit tightening.

The credit tightening ended a five-year period of low interest rates which significantly fueled the strong US economic recovery.

Yet automakers have also benefited from cheaper steel, as speculation and hoarding seem to have subsided after the credit tightening.

The caution goes far beyond the credit tightening of the last year.

"Over the past three weeks there has been more credit tightening than we had planned," Mr. Greenspan said.

But, the Fed study said, "a growing number of indicators suggest that the period of credit tightening has ended and easing steps may be in train."

"It's very likely the Fed will end up overdoing the credit tightening."

The stock market rose moderately after reports showed a slowing of the economy, providing evidence that the Federal Reserve's aggressive credit tightening was having an impact.

When it appears that the Fed is finished with its credit tightening, he added, it would be time to nail down the prevailing levels for the longer term.