At least one member of the Federal Reserve Board thinks it may be time to start raising interest rates.

Thomas Hoenig, Kansas City’s Federal Reserve President, told the FOX Business Network on Monday that maintaining historically low interest rates and bringing back other emergency policies – namely quantitative easing – could do more harm than good.

“Low interest rates did not cause this crisis, and low interest rates -- if we continue them on -- will have the effect over time of creating new imbalances, and is basically harmful for the long-term recovery of the economy,” he said.

But the Fed needs to act “cautiously” if it hopes to avoid a replay of the sort of bubble that led to the recent financial crisis, he warned.

“I think we need to move rates very modestly,” said Hoenig. “I'm not advocating for high rates at all, but something that's off of zero.”   

Knee-jerk responses to the slow recovery, such as maintaining low interest rates indefinitely or initiating another round of "quantitative easing" -- in which the Fed buys government securities to promote liquidity and pump cash into the economy – could lead to “future imbalances and future bubbles,” he said.

“And you can see it I mean if you look at the price of gold. In our area of the country (the Midwest), you're seeing money put into agricultural land where the production values wouldn't support that by themselves.  People are looking for safe havens,” said Hoenig.

Ultimately, these policies could cause higher inflation “that will harm middle America particularly,” Hoenig said.

Stubbornly high unemployment and a long, fitful recovery have understandably caused anxiety among Americans. But fiscal policy makers shouldn’t succumb to an impulse to act reflexively.

“I think that we all tend to look at the most-recent data and say, ‘That's what the future holds.’  But the fact of the matter is in other recoveries, we've had a slowing in the economy before it gained strength,” he said.

For months Hoenig has been the lone dissenter among the 12 members of the Federal Open Market Committee as that influential group, which essentially sets U.S. fiscal policy, has maintained the same strategies used during the darkest days of the economic downturn.

The U.S. economy is going through a “fundamental restructuring,” he said, as consumers and business de-leverage after years of easy credit which allowed them to run up huge debts.

Lowering this debt is painful, especially in a recovery, but the process will benefit Americans in the long-term, he said.

The impact of this deleveraging has been especially tough on labor markets, he said. “It’s not what anyone wants but (we’re) heading in a positive direction,” he said.

“I think we are, in a sense, fortunate to have the ability for our economy to go through this extensive adjustment and still have positive growth.  And I think that's what we need to focus on, and look to the long-term,” Hoenig added.