John Taylor, the Stanford economist best known for devising the Taylor rule, has co-authored a short paper with Johannes Stroebel on “the impact of the Fed’s mortgage-backed securities purchase.” The aim of the purchase was to reduce mortgage interest rates. But Taylor and Stroebel suggest that the program has had no significant effect, and that it was the impact of changing levels of prepayment risk and default risk that did virtually all of the work. This is hardly dispositive, but it does raise interesting questions regarding some of the Fed’s recent hyperactivity. This is one reason why I wish we were thinking more rigorously about our broader regulatory framework.