The Federal Reserve can leave interest rates where they are for now because inflation is not likely to rise much even if the U.S. job market continues to improve, St. Louis Fed President James Bullard said on Monday.

"The current level of the policy rate is likely to remain appropriate over the near term," Bullard said in slides prepared ahead of a speech to the America's Cotton Marketing Cooperatives 2017 Conference in Nashville, Tennessee.

The personal consumption expenditures (PCE) price index excluding food and energy, which is the Fed's preferred gauge of inflation, has been running at 1.5 percent and has trended away from the central bank's 2 percent target in recent months.

Bullard said that measure of inflation is forecast to rise only to 1.8 percent even if the U.S. unemployment rate falls to 3 percent from the current 4.3 percent. With so little upward pressure on inflation, the Fed does not need to raise rates to slow growth, he said.

Bullard's comments are largely in line with those he has been making for over a year, arguing that the Fed does not need to raise rates until the U.S. economy breaks out of its pattern of about 2 percent annual growth.

That's unlikely to happen in the near term, Bullard said on Monday. The economy grew just 1.9 percent on an annualized rate in the first six months of the year despite a rebound in the second quarter after a sluggish first quarter.

"The 2 percent growth regime appears to remain intact," Bullard said.

Bullard does not vote on monetary policy this year at the Fed, though he participates in the central bank's regular policy discussions in Washington.