Lacker said he expects economic growth of about 1 percent over the next year, hampered by the continued slump in housing. Still, economic weakness shouldn't deter the Fed from its focus on inflation, he said. Inflation excluding food and energy prices is likely to rise to about 2.5 percent before moderating, Lacker said in his radio interview.

Lacker said consumers' expectations of inflation are "elevated" and show "fragility."

"We are still in a fairly risky situation" on the inflation front, he said.

The Fed can raise rates without impeding a credit market recovery and such a rate increase may occur sooner than many people expect, said Dallas Fed President Richard Fisher, who dissented Federal Open Market Committee votes five times this year, preferring to raise them last month.

Atlanta Fed President Dennis Lockhart said in an Aug. 15 interview he expected that "the reasonable policy debate will be around holding versus raising rates." Philadelphia Fed President Charles Plosser said July 23 that policy makers should act before inflation expectations become "unhinged."

Lacker's advocacy for an early rate increase may not prevail on the committee, according to Robert Eisenbeis, chief monetary economist at Cumberland Advisors, and former research director at the Atlanta Fed.

Lacker "saw prospects for slower growth in the future," Eisenbeis said. "Yet he was also concerned about rising inflation. I think growth is going to be the dominant concern and that's what's going to carry the day for most of the people there."