Hoenig makes case for letting interest rates rise

Low interest rates aren't to blame for the nation's economic problems and keeping them low "will have the effect over time of creating new imbalances, and is basically harmful for the long-term recovery of the economy," he said. 

Tinkering in the short-term to get immediate results could create "the conditions for additional imbalances, future bubbles that we have to deal with," he said. 

One long-term issue could be higher inflation that will affect middle-income Americans. 

The nation's high level of unemployment, at 9.6 percent, has been persistent because interest rates have been too low for too long, Hoenig said. 

As to modest economic recovery, "we are involved in rebalancing some important areas. And I don't really want to see us create new imbalances as we go along that path."

The economic recovery doesn't rely solely on actions by the Fed.  

"We can't control everything," he said. "There are a lot of other things affecting this economy, and those have to be recognized."

He said the uncertainty that is in the marketplace around taxes, healthcare and regulatory reform also are having effects. 

The Federal Open Market Committee's next meeting is Nov. 2-3.