In a bid to stimulate the economy, the Federal Reserve now says it is going to buy up to $900 billion more of Treasury bonds. To do so, it will print $600 billion of new money.

So what does this mean for you and your money? If you want a clue, take a look at the bond market. Long-term bond prices fell within moments of the Federal Reserve's announcement. Both regular and inflation-protected bonds dropped, sending yields higher.

The market is clearly worried about the rising risk of inflation. To put this in context, on Aug. 26, just before Fed Chairman Ben Bernanke first unveiled his plans for his new wave of bond purchases, the market was predicting 1.5% inflation over the next ten years.

Today, just three months later, the forecast is 2.1% a year. And those forecasts could keep rising, according to Eric Stein, a bond manager at Eaton Vance

The Fed is erring on the side of caution. It has to. At all costs, Bernanke desperately wants to avoid a deflationary spiral, which would be an economic disaster. As a result, he is more than willing to embrace the risk of inflation.

Anyone who owns long-term bonds should be nervous. For two months, the prices of long-term bonds have been driven higher by expectations that the Fed will buy them at even more elevated prices. The market has now fully priced in most of those expectations, suggesting the balance of risk is now on the downside.

And if you were thinking about refinancing your mortgage, now is probably a pretty good time. Long-term home loan rates which depend, ultimately, on Treasury yields are at historic lows. Bankrate cites some 30-year rates at 4.25% or lower. If bond yields continue to rise in the wake of the Fed's announcement, you can expect those mortgage rates to follow.

Yet there are big caveats. Markets are unusually divided about what is coming next.

David Rosenberg, chief economist at Gluskin Sheff, says the Fed has set a moderate course that s leaving both bulls and bears unhappy. The bond purchase program is too small for those who fear we are on the verge of a downward, deflationary spiral. But it's way too big for those who say the economy has already skirted a double-dip recession and is now recovering.

Back in the 1990s, some people talked about a "Goldilocks" economy "not too hot, not too cold." Michael Hanson, senior economist at Bank of America, says we're now in a reverse situation: "This is Goldilocks where nobody likes the porridge."

If that unhappiness spills over into the equity markets, it may offer lower prices for any investors currently on the sidelines. After a two-month rally in shares, driven in large part by expectations of the Fed's new bond purchases, they are probably due for a break.