Speaking in an interview with Bloomberg TV, Richmond Federal Reserve President Jeffrey Lacker (non-voter) said the Fed should not wait too long for a rate hike.

The Richmond Fed President said inflation will slow if oil prices drop. He added that inflation is still a "risky situation," and that keeping inflation in check requires a tight monetary policy.

Lacker also noted that inflation expectations have stabilized, but are still fragile. He said the Fed funds rate shouldn't be lowered anymore. He expects core inflation to rise further before falling.



Lacker said he expects housing to hit bottom next year and that exports will continue to grow. Commenting on the economy, he predicted that the U.S. economy will grow by 1% next year.

Finally, Lacker said credit pressures shouldn't hamper the Fed's outlook on rates and that one should keep Fannie and Freddie's final goal in mind. He added that he'd prefer if Fannie and Freddie were 'demonstratively' privatized.

By Steve Stecyk and edited by Sarah Sussman