But it pushes up costs drastically in the short run, because interest rates are higher for long-term debt.
Giving investors cash for long-term debt should prompt them to invest more money in other assets.QE proper is a third type.
For long-term debt, AT&T's rating was cut by Moody's to A3 from A2, while bonds issued by its broadband operations were cut to BAA1 from A3.
He will have to contend with a mix of calls for stimulus to bolster a sluggish economy and the need for long-term debt reduction through spending cuts and tax increases.
"The economy will continue to struggle and Greece will find it very difficult to go back to the financial markets once the loans expire — especially for long-term debt.
"There is some size of the central bank's balance-sheet that will restart financial markets".The Fed seems to believe its actions matter more for psychology than in influencing the supply of and demand for long-term debt.
Standard & Poor's ratings services upgraded its outlook for long-term debt of the United States on Monday, citing the government's strengthened finances, the recovering national economy and some easing of Washington's political gridlock.
The Fed has followed this up with "Operation Twist", a policy that switches its holdings of short-term debt for long-term debt, with the aim of forcing down yields on the latter.
Introduced in the 19th century to finance municipal infrastructure, it still bears the mark of its origins: companies pay tax even on interest payments for long-term debt, meaning that they can be liable even if they make no profit.Predictably, many firms have set up financing subsidiaries abroad.
John B. Taylor, a professor at Stanford and an adviser to Republican presidents and presidential candidates, said in an interview that temporary stimulus measures were counterproductive, and for long-term debt reduction, "I would try very hard to make it work without revenues".
They allow issuers, like municipal agencies and student lenders, to get better borrowing terms for long-term debt.
