I'm John Bachelor with my colleague Professor Richard Epstein of the Hoover Institution.

He teaches law at NYU and the University of Chicago.

Richard Jerome Powell, the judicious leader of the Federal Reserve,

Surprised Jerome Powell and everybody else.

He went from a steady as she goes, quarter point,

reduction in the cost of money,

to a half point surprising everyone except for the

touts on Bloomberg the night before who were saying we hear half point we hear

half point there it is the half point move and m and Mr Powell assures us that the Fed doesn't see anything we don't see.

You're not worried about a black swan. They do believe the jobs market is soft,

but their job of fighting inflation is near

victory so it's time to adjust that half point now has the market talking

equities equities equities because your cash is not going to gain the way it did when the money was,

when they were charging more for money.

However, the, also the suggestion is that once Wall Street gets a half point it wants more and faster,

what is your measure of the surprise of Jerome Powell?

Well, I'm not surprised. I always thought that they would go big. I do think it has

something to do with the election and particularly with mortgage rates on the home market.

It's very difficult to move that. It's a big shift that it's going to take. But I think the Democrats, in this case, are fairly desperate to make sure that the pains of buying a new home and refinancing an old home are going to be somewhat reduced.

It's a fairly large kind of jump, but not wildly so, of course the rates have been very hard.

The other thing, of course, that they're talking about is the dual mission of the Fed and that's always in my view a mistake.

The argument is the Fed has to both deal with interest rates and job creation.

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