The steep decline in the U.S. economy has begun to moderate, but the ensuing recovery is likely to be slow, Sandra Pianalto, President of the Cleveland Federal Reserve Bank, said on Thursday.

Once the recession ends, we may be tempted to hope that the economy will take off at a full gallop, but that is not likely to happen because of some long-standing imbalances within our economy, Pianalto said in remarks prepared for an investment conference in Louisville, Kentucky.

Pianalto said many Americans now have no choice but to save as they attempt to rebuild personal wealth gutted home and stock price declines.

As people come to grips with the fact that their finances are more uncertain than they had ever thought they would be, they are not likely to resume spending at the pace they once did, she said.

Pianalto is not a voting member of the Federal Open Market Committee in 2009.

(Reporting by Ros Krasny, Editing by W Simon)