The Federal Reserve spent scads of time and money in 2009 and 2010 pumping up the U.S. housing market. In fact, it poured over $1 trillion into the mortgage-backed securities market. That campaign, which ended in March, helped bring mortgage rates way down. Now it looks like “round two” for mortgage buybacks – if one Fed official is right.

The official, Brian Sack, is the chief of the Federal Reserve’s New York markets group. In an early October speech In Newport Beach, California. Sack implied that another round of asset-buying should spur economic growth, and that the Fed should take that step.

Officially, the Federal Reserve won’t do anything until its next meeting on Nov. 2 and 3. But contingency plans were put into place last August to reinvest proceeds from the Fed’s mortgage-investment spree into the Treasury market. But the Fed said at the time that additional investments in mortgage-backed securities were on the table, too.

While nothing is etched in stone, Sack told his audience that criticism that additional asset-buys would not boost the economy were “overstated”.

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"It is true that certain aspects of the transmission mechanism are clogged because of the credit constraints facing some households and businesses, and it is true that monetary policy cannot directly target those parties that are the most constrained," he said, according to prepared remarks.

In plain English, Sack is saying that while any increased stimulus spending by the Fed wouldn’t directly pump up the economy, it could grease the skids for more consumer and business borrowing (and spending).

"It seems highly unlikely that the economy is completely insensitive to borrowing costs and wealth, or to other changes in broad financial conditions," he said.

Loosening up credit has been the Holy Grail for the Federal Reserve since the Great Recession straddled the U.S. economy, Colossus-like, in 2008. But despite ongoing efforts by the Fed to use every tool in its arsenal, the bleak economy just won’t respond to the medicine that the Fed is providing.

That’s just not going to cut it at the Fed, whose “dual mandate”, Sack says, is to stabilize the economy and create an environment where employers are hiring again.

But that’s still not happening.  “The anticipated recovery is relatively tepid and thus delivers only slow progress” toward that dual mandate, he adds.

Sack did say that any additional stimulus would look more like what the Federal Reserve has done historically to fight recessions – and wouldn’t be the “shock and awe” campaign that we saw from late 2008 to early 2010. Shock and awe “might have been appropriate in circumstances when substantial and front-loaded policy surprises had benefits, but different approaches may be warranted in other circumstances," he said.

Sack seems to be floating a trial balloon toward economists and Wall Street. Would the nation tolerate more stimulus measures by government economic policy makers – even a smaller one than what we saw last year?

Americans are clearly burned out from tough economic times, and may barely notice more stimulus from the Federal Reserve. But if the effort only yields meager results – much like the first round of asset purchases - the Fed could lose its credibility with the public.

And you can’t put a price on that.

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