June 10 (Bloomberg) -- Any move to increase interest rates to counter rising inflation pressures should be ``very deliberate'' and gradual, Federal Reserve Bank of Dallas President Richard Fisher said.

``We need to proceed in a very deliberate manner and I expect us to do so,'' Fisher said in a speech today in New York. Fisher said he disagreed with the idea that ``we could move less than gradually if the forces of inflation were threatening.''

The Dallas Fed chief is the only member of the Federal Open Market Committee to dissent three times this year from decisions to lower the overnight bank-lending rate, favoring either no change or less aggressive reduction. Chairman Ben S. Bernanke yesterday said policy makers will ``strongly resist'' any surge in inflation expectations, delivering his clearest message yet that the central bank is done lowering interest rates.

``You don't want central banks with trigger fingers,'' Fisher said to the Council on Foreign Relations. ``One would expect gradualism.''

Fisher said he would have preferred to hold the Fed's target rate at 3.5 percent, while policy makers lowered it this year to 2 percent in the fastest reduction in two decades. They next meet June 24-25.

The Dallas Fed president warned that rising prices are beginning to work their way into the public's expectations, though he added that wages in the U.S. have not been affected.

``If we saw wage pressure, then we'd worry more about inflation risks,'' Fisher told reporters.

Accelerating Inflation

Fisher repeated that the Fed must act firmly to contain accelerating inflation. Rising international demand for energy and food in markets such as China is spurring prices globally, he said.

``The worst conceivable thing is for inflationary expectations to take grip and we cannot allow that,'' Fisher said. ``We cannot allow it to take grip. We cannot accommodate it.''

The consumer price index rose 3.9 percent for the year ending April, and expectations of inflation five years from now rose to 3.4 percent in May versus 3 percent in January, according to the Reuters/University of Michigan Survey.

New York Fed President Timothy Geithner said yesterday that a ``very large sustained rise'' in prices will prompt central banks to pursue ``tighter monetary policy.''

Traders anticipate the FOMC will keep its benchmark rate at 2 percent this month and raise it as soon as September, futures prices indicate.

Fisher added he wouldn't ``show my hand'' on how he would vote at future meetings.

He did endorse European Central Bank President Jean-Claude Trichet's anti-inflation policy. ``The only way to establish the credibility of the currency is you must establish price stability,'' he said.

To contact the reporters on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net; Anthony Massucci in New York at amassucc@bloomberg.net

Last Updated: June 10, 2008 10:56 EDT