Note: Carry unused color up wrong side of work.
With A, cast on 40 sts loosely. Divide sts onto 3 needles and join, being careful not to twist sts. Place marker for beg of rnd.
Rnd 1: With B, *k2, p2, rep from * around.
Rnd 2: With A, *k2, p2, rep from * around.
Rep last 2 rnds until piece measures about 5 1/2 in. (14 cm) from beg.
Note: Continue to alternate colors A and B throughout the remainder of the pattern.
Next Rnd: *K19, k in front and then back of next st (increase made), rep from * once – 42 sts at the end of this rnd. Continue in St st worked in the rnd (k every rnd) until piece measures 9 in. (23 cm) from beg.
Next Rnd: *K5, k2tog, rep from * around – 36 sts.
Next Rnd and every other Rnd: Knit.
Next Rnd: *K4, k2tog, rep from * around – 30 sts.
Next Rnd: *K3, k2tog, rep from * around – 24 sts.
Next Rnd: *K2, k2tog, rep from * around – 18 sts.
Next Rnd: *K1, k2tog, rep from * around – 12 sts.
Next Rnd: K2tog around – 6 sts.
Cut yarn, leaving a long tail. Thread tail through remaining sts and gather tightly together. Fasten off.
With A, make a large pompom. Tie pompom to top of Hat. Weave in ends.