Does the Federal Reserve Even Understand What It's Doing Anymore?

After a much publicized two-day meeting, the Federal Reserve announced today that they would be selling $400 billion in short term debt and buying $400 billion in long term debt.  The idea being that this would put downward pressure on long term interest rates, supposedly boosting the economy (as many mortgages are priced off of the 10 year treasury) but without increasing the money supply any further.  I think that idea is completely wrong and this move will probably be a net detriment to the economy.  The reason is simple, banks borrowing costs are based on short term interest rates and their profit is based on long term rates (i.e. they borrow short and lend long). So this program will, if it does what the Fed says it wants to do, hurt the profitability of banks, making them less likely to lend. Usually, when you have a slowing economy, the Fed actually does the opposite of this move, they lower short term interest rates to help make the banks more profitable and more likely to lend.  It really seems like the Fed has no idea what it's doing.