Kevin Warsh, a voting member of the Federal Reserve Board, signalled concerns about inflation and said fellow Fed members need to be cautious in cutting rates.

Warsh said inflation has been "elevated for some time" and the Fed should resist the urge to cut rates even if the economy slows.

"Inflation has been elevated for some time and prices of commodities are surging. I find these trends particularly vexing at a time when global demand growth, most likely, has slowed," Warsh said in a speech in Washington entitled, 'Using the Federal Funds Rate in Extraordinary Times.'

Warsh said an outlook that expects benign inflation faces "considerable upside risk" and that policy makers have already lowered rates by a cumulative 325 basis points.

"The Federal Reserve has employed the hammer with considerable force in the last nine months ? even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again," the Federal Reserve governor said.

Warsh said if rates remain low for too long, it could hurt the Fed's credibility on inflation and that other liquidity measures are "proving useful" in alleviating credit market tightness.

By Adam Button and edited by Cristina Markham