The Federal Reserve should consider delaying the end of its bond-purchase program to halt a decline in inflation expectations, said St. Louis Federal Reserve Bank President James Bullard.

Bullard, who helped lay the intellectual groundwork for the Fed's quantitative easing program, said U.S. economic fundamentals remain strong, and he blamed recent financial- market turmoil on downgrades in the outlook for Europe.

"Inflation expectations are declining in the U.S.," he said in an interview. "That's an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE."

Bullard is the first Fed official to publicly suggest the central bank should extend its asset-purchase program when policy makers meet later this month. U.S. stocks erased losses and Treasury yields rose on expectations the Fed will take action to insulate the U.S. from global economic weakness.

"We are watching and we're ready and we are willing to do things to defend our inflation target," Bullard said.

Fed officials are scheduled to next gather on Oct. 28-29 and have said they expect to end asset purchases after that meeting. The program has already been wound down to combined monthly purchases of $15 billion of Treasuries and mortgage backed securities, from $85 billion in December 2012.

"Fifteen billion by itself is not that consequential," Bullard said. "But what is consequential is committee intentions on future QE, and we have certainly seen through the taper tantrum how important those can be."

He was referring to an episode last year when Treasury yields shot up after then-Chairman Ben Bernanke said the Fed would start slowing bond-buying sooner than expected.

Bullard said he continues to forecast the first Fed interest-rate increase at the end of the first quarter, based on the expectation that the current global market turmoil won't affect U.S. prospects. Economic growth could be bolstered by declines in oil prices and long-term interest rates, he said.

A pause in tapering would protect against "downside risk" and bolster inflation expectations, he said. "We could react with more QE if we wanted to."