Federal Reserve Bank of New York President William Dudley, Eric Rosengren, president of the Boston Fed, and Fed Governor Elizabeth Duke followed Bernanke in highlighting the need to fix housing to speed the recovery.

Dudley called on the government to remove obstacles to refinancing, saying in a Jan. 6 speech to the New Jersey Bankers Association that the Fed is no "substitute" for government measures. Rosengren said that day in Connecticut he supports buying more mortgage-backed securities. San Francisco Fed President John Williams sees a "strong case" for the move, he said yesterday.

The Fed has taken unprecedented steps to lower borrowing costs as it held short-term interest rates near zero since 2008. It acquired $1.25 trillion of government-backed mortgage securities and $172 billion of federal agency bonds from December 2008 through March 2010, as part of a process known as quantitative easing, or QE. It embarked on a second stage involving $600 billion of Treasuries through last June.

In October, it began recycling proceeds from the mortgage and agency debt into home-loan securities, buying $80.2 billion through Jan. 4. Reinvestment will probably total about $200 billion this year, according to Barclays, JPMorgan Chase & Co. and Credit Suisse Group AG.

Dudley's comments and the Fed study signal a greater likelihood of QE3, according to Ajay Rajadhyaksha, a Barclays analyst in New York, who has estimated it could involve $500 billion to $750 billion of mortgage-bond purchases over a year.

"The investment community is almost regarding quantitative easing as a free good and if it's a free good, why not just do QE10,000," said Sanders, a former head of mortgage-bond research at Deutsche Bank AG. "If rates start going up, somebody's going to have to pay the tab, and you know who that is: John Q. Public."

While central bankers are frustrated with the results of their record monetary stimulus, Sandra Pianalto, president of the Cleveland Fed, said yesterday after a speech in Wooster, Ohio that "on the margin" it's affecting mortgage refinancing.

Last year, refinancings totaled $858 billion, according to a Mortgage Bankers Association estimate. Average rates on typical 30-year mortgages between 3.9 percent and 4 percent since early December, based on Freddie Mac data, bolster home prices by allowing property buyers to pay more. A monthly bill of about $1,430 covers a $300,000 loan at a 4 percent rate, versus $267,500 at 5 percent.

Unemployment is also easing. A Labor Department report showed that the jobless rate fell to 8.5 percent in December, the lowest since February 2009. Unemployment peaked at 10 percent that year as the financial crisis triggered the biggest economic contraction since the Great Depression in the 1930s.

Monetary policy hasn't been enough to prevent house prices from continuing their more than five-year long slide, with Pacific Investment Management Co.'s Scott Simon, the bond manager's mortgage head, forecasting further declines of 6 percent to 8 percent.