Lower interest rates: So what?

The Fed's reshuffling of debt may well have the unintended consequence of making it harder for banks to make money from lending, McBride says. If that happens, they'll be less willing to pay as much on consumer deposits.

LONG-TERM BONDS

By buying long-term Treasurys, the Fed aims to drive the rate of those securities down. That means investors in long-term bond funds who sought to play it safe and pocket reliable income could see less of it.

"If you're a retiree who was relying on interest income, this could prove to be a negative depending on where you're invested," says Don Rissmiller, chief economist of Strategas Research Partners.

Another potential negative is that the cost of insurance could rise. Lower rates would be bad news for insurance companies, particularly life insurers. That's because they hold much of their investment portfolios in long-term bonds. If their investment returns drop they could compensate by charging consumers more, says David Nanigian, assistant professor of investments at The American College in Bryn Mawr, Pa.

But neither of these impacts should be drastic. Long-term interest rates aren't expected to come down more than 0.2 percent point in the wake of the Fed action.

STOCKS

Analysts say Operation Twist could raise stock prices by boosting confidence and helping borrowers and savers.

But Fed Chairman Ben Bernanke can only dream of providing the stock market with anything close to the 28 percent rally that took place over seven months following the announcement last fall about the second round of quantitative easing, or QE2 — a $600 billion program to buy government bonds.

Even if stocks head upward for now, Joseph LaVorgna, chief U.S. economist at Deutsche Bank, doesn't see anything for investors to cheer in the Fed's actions.

"As long as the events in Europe are continuing to play out, that's going to keep a lid on equities," he says. "These actions won't do much other than cause people to say, 'OK, what next?'"

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