St. Louis Federal Reserve Bank President James Bullard said on Thursday he is worried about the risks the United States could fall into a Japan-style quagmire of falling prices and investment that is hard to escape.

He also said the Federal Reserve should consider buying more Treasury securities, instead of promising an extended period of low rates to support recovery, should inflation drift lower.

"The FOMC's extended period language may be increasing the probability of a Japanese-style deflationary outcome for the U.S., and on balance, the U.S. quantitative easing program offers the best tool to avoid such an outcome," he wrote in a research paper, referring to the central bank's policy-setting group, the Federal Open Market Committee (FOMC).

"With a little bit weaker numbers on the economy and inflation a little bit low, people are starting to talk about the possibility of a Japanese-style outcome for the U.S.," he told reporters at a news conference on the research.

The Fed's long-running promise to hold benchmark rates exceptionally low for an extended period — which is aimed at spurring growth — could lead businesses and consumers to anticipate slight deflation ahead, the St. Louis Fed chief said.

"Of course, that isn't what we're trying to do with the extended period language, what we're trying to do is encourage output growth and production, and through that channel, get inflation to move higher," he said.

Bullard said he continues to view the most likely course for the U.S. economy as a gradual recovery and that more easing of financial conditions will not be necessary. But he said the Fed should be prepared for further actions if unexpected shocks materialize.

The St. Louis Fed leader, a voter this year on the Fed's policy-setting panel, said he does not plan to join Kansas City Fed President Thomas Hoenig in dissenting against the extended period language, even though research Bullard released on Thursday found the language to be problematic.

Bullard said he took the unusual step of publishing his research and holding a news conference about the topic to stimulate debate about the effectiveness of the extended period language in achieving the Fed's goal of restoring stronger economic growth.

The Fed lowered borrowing costs to near zero in December of 2008 and has already flooded the economy with more than $1 trillion of credit to boost growth after a painful recession.

The recovery has stumbled in recent weeks, and Fed Chairman Ben Bernanke has said the economy faces unusually uncertain prospects. The Fed could take further steps to bolster growth if needed, he said.