In remarks he made Monday at Washington and Lee University, Federal Reserve Bank of Boston President Eric Rosengren expressed concerns about the consequences of inflation that’s too low, rather than too high.

"To many of you, the idea that inflation could be ‘too low’ may seem puzzling," Rosengren said. "Why would it be desirable to push the inflation rate up from its current rate of 1.4 percent to something a bit higher?"

For starters, Rosengren said, any unanticipated weakening of the economy could push very low inflation right down into deflation.

"When households and firms expect that prices in the future will be lower than they are at present, they tend to postpone expenditures, awaiting the lower prices. Historically, under such circumstances, economic activity has tended to remain depressed," he said.

Besides dampening spending, deflation could be problematic for debtors, causing the real value of their loan payments to rise over time and hindering repayment.

Rosengren pointed to a recent long period of slow growth in Japan as an example of the problems posed by too-low inflation and mentioned concerns by some that Europe, too, may be in for a period of mild deflation.

He also expressed concerns about the implications for interest rates.

"Because nominal interest rates can’t go below zero, when inflation and interest rates are already quite low, monetary policy has only limited room to further lower interest rates to offset negative shocks to the economy," Rosengren said. "Another way of thinking about this is that an economy with significant slack may need very low real interest rates to return with any speed to full employment. If the short-term inflation rate is close to zero, it’s hard to push real interest rates much below zero."

Rosengren said "one possibility for why we have been missing on the Federal Reserve’s 2 percent inflation target could be that there remains significant labor market slack."  He noted the still-elevated level of the broader measure of unemployment that includes workers who are part time for economic reasons and who are marginally attached to the labor force.

"We should not be complacent about persistently missing our inflation target," concluded Rosengren. And "until it is clear that we are on the path to achieving both our 2 percent inflation target and maximum sustainable employment," monetary policymakers should remain patient about removing accommodation.