If you didn’t know what “quantitative easing” was when you woke up Wednesday, you probably will soon.

Federal Reserve bankers came out of their two-day Federal Open Market Committee meeting this afternoon with some blockbuster, if not wholly unexpected, news: the Fed will purchase about $600 billion more in long-term Treasurys by the end of the second quarter of 2011 in an effort to further prop up the U.S. economy. The Fed will also continue its existing policy of reinvesting principal payments from its current securities holdings.

Of course, this will be the second go-round for quantitative easing – a fancy way of saying the Fed is going to print more money – and questions abound. Namely, is it needed and will it work?

“Eventually, the labor market will improve, and Bernanke and his chums will take credit for what would have happened anyway without any assistance from the Fed,” said Ed Yardeni, the president of Yardeni Research. “The problem is that they will have to drain lots of reserves from the banking system once this happens by selling their Treasuries. The resulting backup in bond yields could then depress the economy and the labor markets. QE-2.0 is simply a very bad idea.”

In its assessment of the economy, the central bankers said household spending is getting somewhat better but is still being reined in by high unemployment, soft income growth, lower housing wealth and tight credit. Business spending is on the rise, but not at the pace that it was earlier in the year. Commercial real estate is still weak, too.

The Fed left the target on short-term interest rates within the already established range of 0-0.25%.

Stocks gyrated violently as the announcement was released, but the major stock market indexes were generally trading where they were before the announcement about 15 minutes afterwards.

The Dow Jones Industrial Average was recently off 50 points at 11138.