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Growth and inflation control? The US Federal Reserve's dual mandate is unenviable. Ben Bernanke is unlikely, therefore, to thank governor Frederic Mishkin for his speech to the Oliver Wyman Institute in Philadelphia earlier this month in which he proposed to make the Fed's job that little bit harder.

Mr Mishkin put forward a case for using specific regulatory tools to deal with asset price inflation, rather than just interest rates.

"Just as doctors take the Hippocratic oath to do no harm, central banks should recognise that trying to prick asset price bubbles using monetary policy is likely to do more harm than good," he said.

While acknowledging the difficult balancing act faced by monetary policy committees looking to ease lending conditions while keeping the lid on inflation, Mr Mishkin thought more could be done to modify unhealthy spurts of growth in specific areas.

"Because asset price bubbles can arise from market failures that lead to credit booms, regulation can help prevent feedback loops between asset price bubbles and credit provision," he continued. "Our regulatory framework should be structured to address failures in information or market incentives that contribute to credit-driven bubbles."

His proposals reflect the current lie of the macroeconomic land accurately. Since the Federal Reserve, European Central Bank and Bank of England pumped billions of dollars' worth of emergency liquidity into markets last year, commodities have sprouted into extravagant bloom. As Guy Monson and Subitha Subramaniam pointed out in their Sarasin & Partners asset allocation update two weeks ago, ready cash pushed into the system for one purpose has a tendency to resurface unexpectedly somewhere else. The necessary release of one pressure valve has built up steam elsewhere.

The problem in the UK is, of course, that the Bank of England's Monetary Policy Committee ultimately concentrates on meeting inflation targets rather than taking a wider view on the economy. The prospect of smaller asset bubbles is considered depending on the varying opinions of the committee members, but rarely constitutes a significant factor behind interest rate decisions. The idea of additionally using regulation as a specific instrument to fine-tune sector inflation would fall well outside the bank's remit, and would need to be instigated on a top-down basis by the government rather than the financial community or the FSA.

Gary Hunt, spokesman for the Bank of England, adds that in any case the idea of reintroducing 1970s-style credit controls for banks on a regulatory level has long been outmoded by the pace of open financial markets, and would be ill-fitted to the functioning of the modern City.

The contrast between the US sub-prime housing bubble - to which Mr Mishkin was referring - and the boom in commodities prices we are seeing now should also be borne in mind. While lax monetary policy on behalf of the Fed at the start of the decade precipitated a downturn that has rocked the country, and global stock markets, it is unlikely even a sharp correction in agricultural goods prices will hit diversified portfolios in a severe way. Soft commodities bull Eclectica Asset Management also highlights the supply and demand constraints underpinning the charge in wheat, soybean and grain futures. Such strong fundamentals certainly never underpinned the low end of the US mortgage market.

Advisers and clients would be best off following the opportunistic tone set by Mr Monson and Ms Subramaniam. Instead of bemoaning the lack of specific asset price regulation on either side of the Atlantic, Sarasin & Partners is already jockeying for position to squeeze returns out of the next beneficiary of central banks' liquidity injections. Having creamed profits from commodities holdings, the fund house is upping exposure to global stock markets, expecting equity rallies as the cash starts to circulate more widely. While Mr Mishkin's suggestions may one day help the Federal Reserve sustain the US economy more smoothly, in the short term investors should position themselves to take advantage of asset-specific inflation as and when they can.