"The Federal Reserve's controversial decision to buy long-term Treasury securities is a step Chairman Ben Bernanke has been contemplating for much of this decade in thinking about how to prevent a return of deflation and depression.
He hopes Wednesday's move will push down long-term borrowing rates benchmarked to Treasury bonds, from car loans to mortgage debt to corporate bonds. But it could backfire and fuel fears that the Fed, by using its power to print money to help the government finance soaring budget deficits, is kindling inflation. Those fears could, paradoxically, send Treasury yields higher.
[Fed's Gamble: Buying Long Bonds]
The market's initial reaction was mostly positive. Treasury yields dropped sharply, as previous research conducted by Mr. Bernanke suggested would happen."
