Low interest rates on loans such as mortgages have room to fall even lower, though monetary stimulus measures designed to push such borrowing costs down need to be addressed with care, Federal Reserve Bank of Atlanta President Dennis Lockhart told CNBC.

Since the downturn, the Federal Reserve has injected trillions of dollars in fresh liquidity into the economy to drive down interest rates via asset purchases from banks, a monetary policy tool known as quantitative easing that weakens the dollar and sends stock prices rising as side effects.

Fed officials have said they cannot rule out intervening with further easing measures, though many economists have pointed out that further action will have muted effects since rates are already low thanks to past Fed policies.

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Don’t rule out further action, however, as borrowing costs could fall further, although the economy would have to deteriorate more to nudge the Fed into action, Lockhart told CNBC.

“I think it’s a close call really. If we were to see deterioration from this point and let’s say a persistence of job growth numbers that were well below 100,000 a month or if we were to see signs of disinflation that could signal the onset of deflation, then there wouldn’t be much of a question about policy,” Lockhart said.

The economy added a net 163,000 jobs in July, 64,000 jobs in June and 87,000 in May, according to the Bureau of Labor Statistics.

“Now I think the policy question is how much will you gain and, of course, what are the costs, short and longer term.”

Supporters of quantitative easing have said the tool steers the country away from deflationary decline and has created conditions that encourage hiring.

Critics have argued the policies haven’t really spurred recovery, but have merely printed money out of thin air and planted the seeds for inflation down the road.

Still, they have pushed borrowing costs down, and they could go even lower.

“Certainly rates could be lower and mortgage rates, for example, could edge down enough to qualify some more borrowers, some more homeowners,” Lockhart said.

“I do think further stimulus, if we were to put that in place, would have some positive effect,” Lockhart added.

“I’m not overly concerned with the longer-term costs of more action, but at the same time, I see limited benefit from more action.”

Fed officials including Chairman Ben Bernanke have said they cannot rule out the need for stimulus but have stopped short of hinting that specific plans to do as such are under way.

“Growth is neither strong enough for Bernanke to take any additional easing off the table, but it is hardly weak enough to force him to announce new actions,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Penn., according to Reuters.

The economy grew 1.7 percent in the second quarter, according to revised figures from the Commerce Department, up from an initial estimate of 1.5 percent.

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