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Ever tried wrestling with a giant pile of jello? That must be what it feels like for US monetary policymakers these days. One of the criticisms of ex-Federal Reserve chairman Alan Greenspan’s view that central banks should not target asset prices directly, but focus instead on growth and inflation, is that a strategy of mopping up when bubbles have burst can be not only prohibitively costly, but also highly uncertain.

Indeed the Fed’s grip on interest rates is slipping. Since the beginning of March, yields on 10-year govern- ment bonds had risen by some 20 basis points, before Wednesday’s poor retail sales numbers lifted bond prices. In a normal recession that would be something to celebrate: higher yields can reflect renewed economic confidence. But this is not what the Fed wants. It began quantitative easing in mid-March with the explicit goal of getting borrowing costs down. Nor is it what President Obama seeks. His administration is committed to helping homeowners, and wants up to 5m for refinancing.

To be fair, the Fed has managed to drive mortgage rates below 5 per cent by buying about $100bn of mortgage backed securities a month. But, while refinancings now account for three- quarters of applications – versus about 50 per cent at the top of the housing boom – the surge in volume of applications is tailing off. In the last week of May, the four-week moving average of the number of refinancings fell 7 per cent, according to the Mortgage Bankers Association.

One problem is that, while 70 per cent of 30-year mortgages by out- standing value would benefit from refinancing, FTN Financial calculates, banks are unwilling to re-engage with borrowers. They only see risks: unem- ployment is rising, as is negative equity, while home foreclosures hit an all-time high in April. Even when the Fed does land a monetary punch, this wobbly recession is proving very hard to tame.

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