UPDATE 1-Fed's Bullard sees medium-term inflation risk

(Adds quotes, details)

WASHINGTON Dec 2 (Reuters) - St. Louis Federal Reserve Bank President James Bullard said on Wednesday the economy faces some inflation risk because of the U.S. central bank's huge balance sheet but expressed confidence about controlling inflation.

"The medium-term risk is for inflation," he said in an interview on CNBC television, adding that the risk could be two to four years out.

"I think we'll make the right call, and I think we'll get it right over the next few years," Bullard said. "But I do think there's some medium-term inflation risk because of the very large Fed balance sheet and because of the uncertainty about how these policies are going to affect the economy going forward."

Bullard repeated that he would like to see the Fed keep alive its program to purchase mortgage-related assets to give policy makers more flexibility in helping to rescue the economy from a painful recession.

The Fed committed to buy $1.25 trillion of mortgage-backed securities by the end of March. It is buying MBS, mortgage agency debt, and longer-term Treasury securities after cutting interest rates to near zero percent in order to stimulate economic growth.

Bullard said he thought the economy would grow more strongly in the fourth quarter than it did in the third quarter, when gross domestic product expanded at a 2.8 percent annual rate.

Bullard did not say when he thought growth might reach a level that would require higher interest rates, but he said the Fed's hand could be forced if prices begin to rise rapidly.

"If inflation expectations start to move up sharply, that's going to trump everything and the Fed is going to have to come in and take care of that," he said. (Reporting by Glenn Somerville; Editing by Leslie Adler) ((glenn.somerville@thomsonreuters.com; +1-202-898-8377; Reuters Messaging: glenn.somerville.reuters.com@reuters.net))