WASHINGTON (Reuters) - Federal Reserve policy-makers consider a flare-up in inflation a greater potential risk than a slowdown, and cautioned that investors should not get too complacent.A pair of influential regional Fed presidents — St. Louis’ William Poole and San Francisco’s Janet Yellen — each said they thought the US central bank’s key lending rate was about where it should be at 5.25 percent.

But Yellen told a business group the biggest risk the economy faces is whether inflation keeps easing as it has shown some signs of doing in recent months.

Poole said bluntly the Fed would act pre-emptively if it must to curb a price breakout, even though he saw prospects as “pretty well balanced” for non-inflationary growth.

“We will be more ready to act, I think, if news comes out on the unfortunate side of inflation not coming down, than we would for news coming down on the other side,” Poole said in an interview with Bloomberg Television.

Poole is a voting member this year of the US central bank’s policy-setting Federal Open Market Committee, while Yellen is not but both draw close attention in markets.

On balance, their remarks implied policy-makers were fairly confident they have managed an economic “soft landing” with slower, sustainable growth and restrained prices.

There was enough fresh news to keep nerves on edge, especially a Labor Department report showing U.S. consumer prices climbed more sharply than expected in January.

Higher costs for food, medical care and air travel pushed the closely watched Consumer Price Index up 0.2 percent and core prices, excluding food and energy, up 0.3 percent.

“This adds credibility to Fed Chairman Ben Bernanke in his monetary policy report to Congress last week that inflation remains a concern,” said Richard DeKaser, chief economist for National City in Cleveland.

Yellen and Poole played down some of the concern over consumer prices, with Yellen commenting that she thought core inflation “had begun to ebb modestly in recent months.”

Poole said that, provided standard forecasts for three percent growth in gross domestic product with gradually declining inflation were met, “the current interest-rate environment, as far as I’m concerned, can stay right where it is.”

The Fed’s key lending rate has been unchanged since June 2006 and minutes from the last meeting of its policy-setting Federal Open Market Committee showed it was retaining its stance of watching vigilantly for inflation.

“Participants did not yet see a downward trend in core inflation as definitively established,” the minutes said, meaning policy-makers remain ready to push rates up if needed.