Fed's Bullard repeats call for 1 percentage point in rate increases by July 1

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

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Feb 17 (Reuters) - The U.S. Federal Reserve should implement a full percentage point of rate increases over its next three meetings between now and July 1, St. Louis Fed president James Bullard said on Thursday, reiterating his calls for strong action from the Fed against stubbornly high inflation.

"We are missing our inflation target on our preferred measure... and policy is still at rock bottom lows and we’ve still got asset purchases going on," Bullard said in a television interview with CNN. "This is a moment where we need to shift to less accommodation."

Bullard's initial comments one week ago in favor of a half percentage point move at the central bank's next meeting on March 15-16 prompted traders in contracts tied to the Fed's target interest rate to temporarily raise their expectations of a half-point increase next month.

That probability has now dropped back below 50% following comments by several other Fed policymakers pushing back against such a move.

"I'm not saying that’s necessarily what we have to do," Bullard said in his latest interview. "I’ve laid out this 100 basis points by July 1st and let the chair manage the committee and the expectations around that appropriately... But I do think it’s important to get moving and I do think it's important markets understand the necessity of the Fed's move."

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Reporting by Chris Gallagher and Lindsay Dunsmuir; Editing by Chizu Nomiyama

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