Relying on the Fed cannot be the sum total of an economic policy to increase economic growth. In fact, current Fed policy may well be saving the U.S. banking system, but it is hardly setting the stage for a robust economic recovery. Scott Grannis (Calafia Beach Pundit) notices the rise in 10-year yields (bold is mine):

The Fed is trying to fight a force of nature—the bond market—and they are bound to lose. Purchasing long-maturity Treasuries, mortgage-backed securities or corporate bonds in an  to keep their yields low is a self-defeating strategy …  Ultimately, inflation and inflation expectations are what drive bond yields. If the Fed buys too many bonds, rising inflation expectations will kill the world’s demand to own bonds, and yields will rise. … So far this year, the yield on 10-year Treasuries has risen from 2.05% to 3.4%, and that is just a down payment on the eventual rise. … As politicians should know (though they refuse to believe), the economy is not something that can be easily manipulated according to their whims or preferences. As the Fed should know (but amazingly they seem to ignore this), long-term interest rates are set by market forces, not by the Fed’s Open Market Committee, whose only job is to attempt to control very short-term interest rates. Rising 10-year yields will put a floor under conforming mortgage rates, which have most likely already hit bottom. Yields on jumbo mortgages still have room to fall

Indeed, one shouldn’t mistake a healthier banking system for an economic recovery, so says David Goldman (Inner Workings bl)og, noting the price rise in commercial MBS:

Distressed assets yield enough to compensate for high losses elsewhere. The zombie strategy, in short, is working out just dandily, thank you. This means: No collapse of US national credit for the time being, and lower volatility (hedging costs) overall — but NOT economic growth.