Definitely a short term solution. However, Fed has two prong mandate. Unemployment and inflation. In the short run they can try to affect unemployment by cutting rates as the economy goes into recession. In the long run they will have to pay attention to the inflation figures. Given the recent write downs by financial institutions, the way the equity markets outside of the US are behaving, and the last unemployment number, it makes sense for the Fed to try to help out the economy in the short run.
In the longer run it will raise inflation, especially with the unemployment rates being as low as they are.