Janet Yellen Presents: What Frightened You, Fed?

We placed a block of ice into the sink the other night and magically, Alfred Hitchcock presented himself.

The famed director began every episode of Alfred Hitchcock Presents by laying the groundwork for the evening’s story of suspense and terror.

In Season 7, on May 1, 1962 the episode called What Frightented you, Fred? aired. It’s the story of a prisoner that once released, prefers to return and remain in prison.

The suspense and terror that preceded the Federal Reserve’s already expected decision to raise the rates by ¼% was presented to traders today by Janet Yellen.

The Committee expects that gradual adjustments to monetary policy will help economic activity expand at a moderate pace. They believe that the labor market conditions will strengthen further.

Most interesting to me is the confidence that inflation will stabilize around 2 percent over the medium term.

Only one member of the committee voted against the raise-Neel Kashkari.

Yesterday, I published a piece on New Mexico and three reasons why that state has seen rising not falling unemployment rates.

A review: low prices in oil and gas, fear of the new health-care plan, a refusal to allow the state to profit in hemp plant products, products we import mainly from China. A benign way of saying, a refusal to invest in the future.

If Kashkari is the Fred in the Fed, perhaps issues like those in NM weigh heavily on his wanting to stay in the prison of dovish monetary policy.

We wonder, what frightened you, Neel?

Kashkari, in a highly unusual move by Fed folks to blog their thoughts, did so today. “The bottom line is the job market has improved substantially, and we are approaching maximum employment,” he wrote. “But we aren’t sure if we have yet reached it. We may not have.”

He added he is “very concerned” about financial stability. He also remarked on the Fed’s trouble with foreseeing the future.