Must-Read Pre-Liftoff Lollapalooza: From last September: the very sharp Neil Irwin on Yellen's blinking:
Yellen Blinks on Interest Rates: "The cost of waiting... to ensure that the economy continues to perform the way... models predict...:
... [is] low.... The challenge... is that we could well get through the end of 2015 without the open questions that triggered the September delay being resolved.... There is no assurance that these key questions... whether inflation is finally... poised to rise, and whether economic softness in... emerging markets will crimp... growth... will be resolved by December or even by the spring.... Inflation continues coming in less than forecast, and the global economy looks perilous....
As... Stanley Fischer said... if the Fed waits until it is absolutely certain it is time to raise rates, it will probably be too late.... The decision to hold off on rate increases this week suggests Ms. Yellen and the Fed want a little more evidence that the economy is on the mend, but they may find themselves back in the same spot before they know it.
But, as Stanley Fischer did not say, if the Fed raises interest rates when the odds are still only 60-40 that it should, it is not probably but definitely raising them too early.