Another U.S. rate hike may be around corner: Fed's Bullard

St. Louis Fed President James Bullard speaks about the U.S. economy during an interview in New York February 26, 2015. REUTERS/Lucas Jackson

NEW YORK (Reuters) - Another U.S. interest rate hike “may not be far off” after the Federal Reserve stood pat last week and made only minor downgrades to economic forecasts, St. Louis Fed President James Bullard said on Thursday.

Bullard, who voted to support the March policy decision, noted in a speech that the labor market had improved since December. “As it turns out, the decision to pause seems to have put more weight on the global and U.S. growth downgrade,” he said in prepared remarks.

After having raised rates from near zero in December, the Fed last week cited a slowdown overseas and early-year market turmoil as reasons to hold steady on rates. Forecasts by the 17 policymakers suggested two rate rises were expected in 2016, and they lowered predictions for expected economic growth.

“The relatively minor downgrades... suggest that the next rate increase may not be far off provided that the economy evolves as expected,” said Bullard.

In recent weeks, Bullard has taken on more hawkish tones after having last month warned that falling inflation expectations suggested the Fed needed to pause policy tightening. Those market-based inflation measures have rebounded in recent weeks.

Reporting by Jonathan Spicer; Editing by Chizu Nomiyama