Q Chris, the Federal Reserve made news Wednesday when it agreed to commit more than $1 trillion to buy more Treasury notes and expand home mortgage programs. How does that affect the average homeowner who wants to refinance or buy a new house?

JOHN, MINNEAPOLIS

A The Federal Reserve Board is pulling out all the stops to stem the economy's downward momentum. It's a smart move -- and risky. The Fed's "throw-the-kitchen-sink-at-the-problem" plan could work to bring down interest rates and restore health to the balance sheets of the banks and the American household. The strategy carries the risk of backfiring if it ends up fanning fears of inflation, which would drive the dollar lower on the international currency markets and raise interest rates here at home.

That said, it's likely that many more homeowners will get the chance to refinance in the short run. Economist David Greenlaw of Morgan Stanley roughly calculates that the average mortgage rate last year on existing loans was around 6.5 percent. If the Fed brings 30-year, fixed-rate mortgages down to 4.5 percent, and all homeowners were able to refinance, household cash flow would be boosted by about $200 billion. Even a quarter to half of that figure would mean welcome relief to many cash-strapped households. Of course, for far too many homeowners, a big impediment to refinancing remains: the home's market value. If your home's value has fallen too far and you don't have enough equity in your home, banks probably won't let you refinance. (The Obama administration's plan waives the home-to-value ratio for those homeowners on the financial precipice, however.)

Still, I'd get out my calculator (or go one of the many online calculators) and start running the numbers. Figure out if refinancing truly makes financial sense to you. I'd also research what bank, credit union or other financial institution you'll work with if you refinance. And if the numbers work, take advantage of this extraordinary moment in economic history to lower the cost of ownership and free some cash flow.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.