Fed's Hoenig wants rates at "more normal levels"-CSPAN

WASHINGTON Feb 26 (Reuters) - Ultra-low interest rates invite speculation, making it important for the Federal Reserve to bring interest rates higher "sooner rather than later," Kansas City Fed President Thomas Hoenig said on Friday.

"One of the issues that I have dealt with is how do we bring interest rates back to a more long-term sustainable level from their extremely low and obviously unsustainable levels," Hoenig said in response to viewer's questions on CSPAN.

"I think we should be going back to a more normal level sooner rather than later," he said.

Hoenig said that unlike many of his colleagues at the U.S. central bank, he was worried that the Fed's near-zero interest rate policy had dangers of its own.

"I don't think it's necessarily in our interest to assure the markets that rates will be zero and they can play the yield curve, because while it has intended effects of assuring the markets that they can invest it also invites and sometimes incites speculative activity and that's what we have to be careful of," he said.