The Federal Open Market Committee will need to keep real interest rates "unusually low" for the next five to 10 years as a result of "dramatic changes in the demand for and supply of safe assets," Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said Thursday.

"Over the past six years, there have been big changes in the demand and supply of safe assets," Kocherlakota told the Minsky Conference, according to prepared text released by the Fed. "I suggest that these changes in asset demand and asset supply are likely to persist over a considerable period of time-possibly the next five to 10 years. It follows that the FOMC will only be able to meet its objectives over that time frame by taking policy actions that ensure that the real interest rate remains unusually low."

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