There is still a big backlog to be made up before it feels like a tight job market. Clearly it's a tighter job market than it was a year ago, and if we continue to add a million jobs a quarter, we'll move in that direction. But I think it will take a little bit of time.

The Fed chairman has a lot of latitude to do things the way he wants to. I don't see why he wouldn't carry the day the way he wants to.

The Greenspan Fed has inaction down to a fine art. They stood by through much of the late 1990s, allowing a very beneficial reduction in unemployment without suffering any inflationary consequences. When they do have to move, they do so quickly and surgically.

Job losses cut directly into the spending of the newly unemployed, and indirectly tend to have a very real impact on the confidence of those who are still working. If demand falls, firms will lay off more employees, and the downward spiral could put us over the edge into a bona fide recession before the Fed's actions can take effect.

It's another in the long series of the no-news-is-good-news story about inflation.

I don't think the Fed is under pressure to raise rates faster than they have been but I think they'd be crazy to think that they should be done tightening.