Dallas Fed President Richard Fisher, one of two Fed dissenters in the last FOMC rate cut decision, said he has a "strong reluctance" about further rate cuts.

Speaking at the Chicago Council on Global Affairs, Fisher warned against "inflating our way" out of the credit crisis and that further cuts may "compound the bad."

"The answer, to be curt, is not to compound the bad by repeating the oft-prescribed remedy of inflating our way out of our predicament with a wing-and-a-prayer promise that it can always be reined in later," Fisher said. "It is for this reason that I have maintained a strong reluctance to further general monetary accommodation."

He noted he has been an advocate of using the Fed's various discount window facilities "within reason, to bridge the financial system's structural problems as the credit markets correct themselves and run the long course of contrition."

By Stephen Huebl and edited by Nancy Girgis