I'll add to this. Edit: consumer-level or corporate level credit won't be any cheaper - only a very specific type of credit, ie mortgages, would become cheaper

I'll add to this. Edit: consumer-level or corporate level credit won't be any cheaper - only a very specific type of credit, ie mortgages, would become cheaper still. As you've rightly pointed out, the Fed is targeting mortgage rates, and thus, home affordability. This is to support house prices and encourage construction-based spending in the economy. House-buying and construction have the biggest multipliers in terms of their knock-on effect on the economy. That's why the recession was so deep - and that's why a recovery can only truly be kick-started by making mortgages affordable. However, some big downside risks here: (a) The European crisis, obviously - although the politicians now seem to have come to their senses a little bit. (b) The credit burden on the US consumer - consumers are still quite leveraged and spending is still financed heavily by credit than by pure income. That will always cause blips to the economy (like oil-price induced inflation) to be magnified and will defeat what the Fed is trying to achieve. (c) Short-term commodity inflation risks - but given that WTI light crude is almost $20 below Brent crude, there already is a North American supply glut.