The latest effort by the Federal Reserve to keep interest rates down through the purchase of longer-term Treasurys and agency mortgage-backed securities may be coordinated with recent White House efforts to boost refinancing activity. Sarah Bloom Raskin, a governor on the Federal Reserve board, said in a speech Monday at the University of Maryland that recent monetary actions – such as the first two rounds of quantitative easing and the ongoing minimal interest rates at the Fed’s borrowing window – have kept interest rates for consumers at record lows. But they’ve failed to translate into economic growth. “Although these monetary policy tools have been successful in pushing down interest rates across the maturity spectrum, the magnitude of the transmission to economic growth and employment has been somewhat more muted than I might have expected,” Raskin said. Analysts at Bank of America (BAC) Merrill Lynch caught on in a research note released Monday. They pointed out the timing of the Fed action with President Obama’s recent mention of the need to refinance underwater borrowers into more affordable mortgage payments. “If the Fed acts on a standalone and uncoordinated policy basis, where the many frictions associated with refinancing are not specifically addressed, it is difficult to see what the benefits of the Fed policy might be. Therefore, the risk of coordinated action appears high to us,” the analysts said. Raskin said an overhang of housing inventory and the continued lack of access to credit for borrowers and businesses continues to thwart any Fed action. In August, the Obama administration called for plans to address both: a new way to sell and possibly rent out the supply of REO held by the government and a new plan to refinance Fannie Mae and Freddie Mac borrowers out of negative equity. “The slow progress in repairing and restructuring households’ balance sheets may also be lowering the normal responsiveness of consumer spending to a decline in market interest rates,” Raskin said. “In particular, lenders continue to maintain relatively tight terms and standards on credit cards and, to a lesser extent, other consumer loans.” The most likely action to help some of the 11 million underwater borrowers in the U.S. would be changing the fundamentals of the Home Affordable Refinance Program. More than 800,000 Fannie and Freddie borrowers moved through the program so far, and Federal Housing Finance Agency Acting Director Edward DeMarco said the regulator is considering changes. But the analysts at BofAML said such a move faces many challenges. HARP loans are shrinking, providing fewer fees to lenders. Loan-to-value ratios are moving higher due to still falling home prices. Average FICO scores are dropping, and borrowers are showing less in savings, which would make a refinance less likely. Representation and warranty claims will need to be waived as well, which in the current climate, may be a long shot, many claim. “While the Fed is intent on improving the rate incentive for these borrowers, virtually every other factor that contributes to prepayments is worsening,” the analysts said. Write to Jon Prior. Follow him on Twitter @JonAPrior.