Think about “supply and demand.” When demand increases, the price will normally increase. In the case of bonds, when prices increase, that means the yield goes down. For example, if a bond sells for a $1,000 and pays a 2% interest rate, the bond owner receives $20.00 in interest annually. However, if that bond rises in price to $1,010, the annual interest income remains the same, which means the yield has dropped to 1.98%. ($20/$1,010)
When the Fed says they will buy more bonds, the demand for bonds goes up, which means the yield goes down. Lower interest rates are expected to help the economy (although it may cause commodity prices to rise).
What the Fed announced on Wednesday was that they would continue “Operation Twist” until year-end, which is a watered-down version of quantitative easing. Normally, bonds that mature early pay lower interest rates than bonds that tie up your money for a long time. If you graph the relationship between interest rates and bond maturities, it is called the “yield curve” and would look something like this: