This is CBS, I on the World, I'm John Bachelor, the Federal Reserve making an announcement that was surprising and at the same time a welcome Gene Marks, a small business columnist, for the Guardian newspaper, UK, and US edition, our

hometown newspaper of the Philadelphia Inquire and other distinguished

publications including the Hill and Jean has a column advising all of us not to get carried away with the Federal Reserve's decision

because, Gene, a very good evening to you, I'm not carried away.

It was a surprise because we went from a quarter point to a half a point within 24 hours.

That was the surprise because Mr. Pall has been so careful for the last two years to announce well ahead of time what they're

thinking what they're doing. What is your measure of the surprise if it is? Good

evening to you. Hi John, yeah, I mean first of all let's go back and let's not forget a little bit of the history here. I mean in March of

22 when the Fed started raising interest rates, the prime rate back that was 3.25%. Now within 15 months,

it was up to 8.5 percent. I mean it was a dramatic almost a tripling of the

primary during that period of time. So that was a lot and you know because it happened so fast we didn't see the impact

of it right away but then we started seeing the impact particularly in the you know in the

months that followed which was businesses you know having a different time renewing

their existing loans and available capital was shrinking for a lot of small

businesses and that comes from other reports from the Fed.

It's just, you know, when interest rates are that high,

primary being 8.5% most of my clients

paying, you know, one, two, three points above that.

You know, when they go and they apply for loans for a piece of equipment or property,

banks will get and they're like, well, I don't know if these guys can really afford to pay it back or

there's way more doubt in a risk and therefore the capital becomes less available.

So that's what the situation was.

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