Former St. Louis Federal Reserve Bank President William Poole says the Federal Reserve's massive program to spark the economy and credit markets risks igniting serious inflation.

The Fed on Tuesday cut the federal funds rate to a range of zero to 0.25 percent and announced ways it will expand its balance sheet to unfreeze credit markets.

"The Fed is sending a message that it will print money to an unlimited extent until the economy expands," Poole told Bloomberg TV.

"Every policy needs an exit strategy. The difficulty of the Fed's strategy will be that in time it will create problems in how the Fed exits from this strategy."

And that strategy carries risks, Poole says. "What they're doing is embarking on massive reserve creation that will in time lead to massive money creation," he explains.

"That experience will end badly, unless they are able to mop up that liquidity in a timely fashion before it leads to inflation."

Robert Parry, former president of the San Francisco Fed, took issue with Poole. "I don't deny Bill's points, but that's a problem for a later time," he told Bloomberg.

"I don't think in the face of a very serious recession we can do much more than plan for when we try to reverse things. Now we must make sure we deal with this significant weakness."