Mr. Hoenig said he believed the Fed had not always learned from its mistakes. By keeping interest rates too low for too long, in his view, the Fed contributed to the dot-com bubble that burst in 2001 and the even bigger housing bubble that popped in 2007. (Before this year, Mr. Hoenig had dissented four times, in July 1995, May and December 2001 and October 2007, all in opposition to lowering short-term interest rates.)

"It is my concern that, by understandably wanting to see things move more quickly, we create the conditions for repeating the mistakes of the past," he said.

Mr. Hoenig's mantra is that monetary policy works with "long and variable lags," meaning that the consequences of today's policies may not be felt until much later. By keeping short-term interest rates near zero, as the Fed has done since December 2008 - and which he supports but not indefinitely - the central bank is increasing the risk of inflation and instability down the road, he says.

But most Fed officials say they believe that Mr. Hoenig's worries are exaggerated. In a televised interview this month, Mr. Bernanke said he was "100 percent" confident of the Fed's ability to tighten monetary policy and raise interest rates when the time came, and called fears of inflation "way overstated."

Other economists say Mr. Hoenig's viewpoint has seemed inflexible.

"I find it hard to understand why Hoenig is still worried about inflation when the obvious trend is downward, toward lower inflation with a risk of deflation," said Joseph E. Gagnon, a former Fed economist who is at the Peterson Institution for International Economics in Washington.

Mr. Hoenig's contrarian disposition partly reflects his Midwest upbringing, far from the Wall Street-Washington axis of influence.

The second of seven children, Mr. Hoenig grew up in Fort Madison, Iowa. He attended a small college in Kansas, was drafted into the Army and served a year in an artillery unit in Vietnam, then received a Ph.D. in economics at Iowa State. He joined the Kansas City Fed in 1973 and became president in 1991.

Lu M. Cordova, the chairwoman of the Kansas City Fed's board, said Mr. Hoenig did not seek attention. Indeed, he sought the board's guidance before he delivered a March 2009 speech, "Too Big Has Failed," which received widespread notice. "He really agonized about whether to speak out or not," she said.

Even critics of Mr. Hoenig acknowledge he has been prescient.

In a speech in 1999, shortly after Congress repealed the Glass-Steagall Act, the Depression-era law that separated investment banking from commercial banking, he warned that "in a world dominated by mega-financial institutions, governments could be reluctant to close those that become troubled for fear of systemic effects on the financial system."

Sure enough, in 2008, the Fed helped sell Bear Stearns to JPMorgan Chase, rescued the American International Group and, after the collapse of Lehman Brothers, bailed out the financial system.

The crisis has only made the biggest banks even bigger. "They have enormous power," Mr. Hoenig said. "Just look at their lobbying expenses. I use the word - and it's a fairly flammable word - oligarchy. These things are huge and powerful, and that's where the money is. This country through its history has abhorred concentration of financial power, and for good reason."

Tuesday's Fed vote will be Mr. Hoenig's last, because the presidents of the Fed's regional banks, other than New York, share votes under a rotation system. Mr. Hoenig does not have a vote next year, and he must retire after he turns 65 in September. As for his future, Mr. Hoenig, a train enthusiast who reads biography and history in his spare time, is certain that he will not follow other Fed veterans who have gone to work on Wall Street. "I can tell you one thing," he said. "I'll never work for a too-big-to-fail bank."

David Fuller's view I'm with Hoenig. One of the problems, as I have mentioned before, is that Bernanke was promoted and appointed as the man who could prevent 1930's-style deflation. He is succeeding, but at the price of future inflationary pressures, which the bond market has finally begun to sniff in recent weeks.

The daunting challenge for Bernanke, as I see it, or his successor (who won't be Hoenig unless, perhaps, a Republican regains the White House) is to see the economy gains sufficient traction so that it can withstand the next round of inflation fighting.

While it will take time for these various dramas to play out, you and I have to deal with whatever occurs, in terms of both protecting and increasing our investment capital.

I maintain that we need to remain wary of bonds but technical rallies in the fixed interest futures sectors should continue to present short-selling opportunities.

The current environment still favours equities because for Fullermoney themes, at least, which includes western multinational companies leveraged to Asian-led growth, profits are generally rising and balance sheets strong, against a favourable monetary background of negative real interest rates. A partial shift by bond investors towards equities is also supportive.

Commodity price inflation presents a short to medium-term opportunity but is also the next big risk, in my view. If food and energy prices rise too rapidly, this would likely hammer bonds and weigh on equities, as investors anticipated higher inflation and interest rates.