Much has been said about the Federal Reserve's bloated balance sheet, and debate has ensued about how it will be resolved, but Federal Reserve Bank of Boston President & Chief Executive Officer Eric S. Rosengren Friday defended the large-scale asset purchase program.

"With respect to monetary policy, the large-scale asset purchase program improves the broader fiscal outlook by lowering interest rates and providing more economic growth," Rosengren said during a panel at the U.S. Monetary Policy Forum, according to prepared text released by the Fed. "In addition, it returns the economy to full employment and an inflation rate at the 2 percent target more quickly than would have occurred in the absence of such actions. We do well to also consider these benefits, and the costs of inaction, when evaluating policy."

There are "policy trade-offs" with the Fed's large-scale asset purchase. And, should the nation quickly return to full employment, or if interest rates climb, Treasury could incur losses.

However, Rosengren said, before dismissing the LSAP, a "more complete comparison" must be made of the evolution of the economy and fiscal policy with and without LSAPs.

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