Federal Reserve Bank of St. Louis President James Bullard, speaking to the Tennessee Bankers Association in Palm Beach, Florida, says the Fed “faces a classic challenge concerning the appropriate pace of monetary policy normalization,” as inflation and employment near its goals.

The “monetary policy stance remains far from normal, despite recent reductions in the pace of asset purchases,” Bullard said. “The FOMC is closer to target today than it has been most of the time since 1960,” Bullard says, referring to both inflation and unemployment.

Debate over how quickly to return policy to normal “is likely to garner significant attention as the economy continues to improve during 2014:” Bullard said.