Monetary policy and interest rates?

When you reduce the supply of something, it's price rises. When you increase the supply of something it falls. Money is just one of those somethings. When the Fed increases the money supply, the short term price of money (interest) falls. Long term interest rates are the sum of a real interest rate plus and insurance premium. If you ume that the Fed is going to continue to increase the money supply, then you will have a large inflation premium for long term rates. Ergo, a money supply increase wil decrease short term prices, but may increase the long term price.