NEW YORK (CNN) -
Dallas Fed president Bob McTeer has long been known as a big believer in the notion that the economy can grow rapidly without causing inflation. So when he says he's worried about inflation it's time to sit up and take notice.
Today on CNN Money Morning I asked Bob where he stands on the current debate over inflation, especially after last week's bigger-than-expected jump in the March consumer price index.
"Well, before that report on inflation, I was very satisfied because I don't think rapid growth, which is what we've been having lately, is inflationary," he said.
In fact, back in the late 90's when things were booming, Bob made his mark by dissenting a couple of times when the Fed wanted to hike rates, because he believed so strongly in the power of high productivity to hold down inflation – the "New Paradigm."
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 Robert McTeer, president of the Federal Reserve Bank of Dallas, talks to CNNfn's Kathleen Hays about the possibility of rising interest rates.
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But he's worried now.
"That particular CPI report was disturbing. And if we have more of those then we'll have to say that inflation may be coming back," he said.
The March consumer price index jumped 0.5%, much more than expected and nearly twice February's 0.3% rise. The core CPI, which excludes food and energy prices, rose 0.4%, double February's rise.
When I asked him why he found it so disturbing – after all, it's just one month – he said because it's not just a leading indicator of potential inflation that's rising, it's inflation itself that's on an upswing.
"When we talk about employment growing, when we talk about retail sales growing and we worry about inflation, I think that's misplaced," McTeer said. "But the CPI measures inflation... and it is one month .. and I'm hoping it will be just one month and that it will go back to the benign state that it was in. "
So is the Fed less willing to be "patient" when it comes to raising interest rates, a stance that it has maintained for several months now even as the economy picks up some steam?
Here Mr. McTeer was a bit more evasive, saying for some people patience means only starting a small series of rate hikes while for others it means not hiking rates at all.
But here's what's interesting.
He said, "the target fed funds rate is so low that it could be a little bit higher and the policy would still be very accommodating."
In other words, he doesn't view a couple of rate hikes as a move to slow down the economy so much as a move to take away some stimulus, and that implies a greater willingness to raise rates. That's my take anyway.
The last time he was on CNN Money Morning in late December he said the Fed did not have to move on rates till it sees the whites of inflation's eyes, and now the Fed has seen one of those eyes, another sign of moving closer to rate hike time.
You see Bob McTeer is a very poetic guy.
In fact, the Dallas Fed's web site has some of the poems, limericks, and clever speeches he is fond of penning.
He even wrote one for me which I proudly share with you here: It's good to be back in New York/ The home of limousines, Bond Belles, and Econoqueens/ Where things aren't quite what they seem/ Where the expected is expected earlier than expected/ And where people are getting impatient with patience/ But to get out of that maze /They tune in to Kathleen Hays.
Thanks to Bob McTeer for an interesting interview and a lovely poem.
Kathleen Hays anchors CNN Money Morning and The FlipSide, airing Monday to Friday on CNNfn. As part of CNN's Business News team, she also contributes to Lou Dobbs Tonight.
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