The Federal Reserve Bank of St. Louis President James Bullard said on Wednesday that the Fed should raise its interest rate soon. He added that the interest rate is needed to boost the U.S. economy.

"Now may be a good time to begin normalizing monetary policy so that it is set appropriately for an improving economy over the next couple of years," Bullard said.

The Federal Reserve Bank of St. Louis president pointed out that the combination of a coming boom in the U.S. economy and low interest rates could lead to asset market bubbles.

He expects that the unemployment rate in the U.S. will decline below 5%.

Bullard is not a voting member of the Federal Open Market Committee this year.