The Federal Reserve's balance sheet will probably continue to be used as a monetary policy tool in the future, since interest rates remain low, Federal Reserve Bank of Boston President and CEO Eric S. Rosengren said Wednesday.

"While the extensive use of central bank balance sheets has been a distinguishing feature of the most recent downturn and slow recovery, I see it as quite likely that this tool will be necessary in future economic downturns," Rosengren said in a speech at Bard College, according to prepared text released by the Fed. "Unless productivity growth and demographic trends change, or monetary policymakers set a higher inflation target, the feasible reductions in short-term rates to combat recessions will not be sufficient. Thus, monetary policymakers are likely to need to use balance-sheet tools."

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