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Zero. a negative interest rate of nearly 6%. that suggests that you have a very large increase in rates ahead of you. so the fed's challenge is to raise the rates to slow this economy but not kill it. that is a very fine line to run. they have to raise rates. how they do it matters a great deal. not only because of scaring the markets, yes, getting people very uncertain. i'd say they will have to start sooner than later. announce their move of what they're going to do. they need to get moving. >> neil: that's what everybody is scare for but expecting. thomas hoenig from the kansas city federal...

The like. they are not known for their rebellious spirit, for their dissenting opinions and for being outspoken in public. but thomas honig is the president of the federal reserve bank of kansas city, and he thinks the federal reserve is making all the wrong moves as it tries to guide america to recovery. welcome. >> thank you very much. delighted to be here. >> so the most important thing the federal reserve does is set interest rates. and by keeping interest rates very low ever since the financial crisis essentially at zero, it has allowed banks, corporations, but also individuals to borrow ...

Going forward. and it is, frankly, one of the reasons that i'm more, if you will, i use the word "cautious" in the sense of saying we need to not tighten -- not have tight monetary policy but to let the markets know that we aren't going to assure them of everything anymore. >> thomas hoenig, pleasure to have you on. >> thank you very much. my pleasure to be here. >> and we will be right back. [ male announcer ] this is lara. her morning begins with arthritis pain. that's a coffee and two pills.

Federal reserve bank presidents who run the regional federal reserve banks and are crucial advisers to the chairman, ben bernanke, ten to be rather conservative economists and businessmen and the like. they are not known for their rebellious spirit, for their dissenting opinions, and for being outspoken in public. but thomas honig has a bit of all of the above and i think it would be very interesting to see what he has to say. he is the president of the federal reserve bank of kansas city, and he thinks the federal reserve is making all the wrong moves as it tries to guide america to recovery....

Circumstances. >> but what's your sense? >> my sense is we erred. we kept interest rates too low. 1%. it's not they want to point blame to myself or anyone else but i do have to say this is what happened, what were the consequences, and what have we learned from it. it is, frankly, one of the reasons that i'm more, if you will, cautious in the sense of saying you need to not tighten -- not have a tight monetary policy but begin to let the markets know that we aren't going to assure them of everything. >> thomas hoenig. [ male announcer ] your hard work has paid off. and you want to pass along ...