Kansas City Federal Reserve President Thomas Hoenig said the Fed should raise interest rates that are near zero to avoid economic imbalances and asset price bubbles.
"I am not advocating for tight monetary policy," Hoenig said in testimony prepared for delivery on Tuesday to the House Financial Services monetary policy subcommittee. The testimony was posted to the committee's web site.
"I'm advocating that the FOMC (the Fed's policy-setting Federal Open Market Committee) move ... to non-zero rates," he said.
Hoenig has long opposed the Fed's ultra-loose monetary policy, which dropped rates to near zero in December 2008. He is not a voter on the FOMC this year. He dissented against easy money policies at every meeting when he had the vote in 2010.
Hoenig's views are not widely shared on the FOMC. The Fed in June concluded a $600 billion bond buying program aimed at boosting a weak recovery.
Fed Chairman Ben Bernanke and other Fed officials have said their next policy step will depend on how the economy evolves.