Fed official says higher rates will be needed soon

WASHINGTON (AP) -- A Federal Reserve official says the Fed should start boosting interest rates "soon," warning that delay could eventually unleash inflation. He does not specify when it should act.

Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, in a speech in New Mexico raises concerns about leaving rates at record lows for too long. He suggests the Fed soon start moving its key rate -- now near zero -- toward 1 percent.

When rate increases are delayed, "the outcome too often is greater inflation, significant credit and market imbalances, and an eventual financial crisis," he says.

Hoenig, a member of the Fed's interest-rate setting committee, opposed the committee's pledge at its past two meetings to hold rates at record lows for an "extended period."