St. Louis Fed President James Bullard said in a speech on Wednesday that the Fed should not raise its interest rate further as inflation expectations declined.

"I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations. A decline in inflation expectations represents an erosion of central bank credibility with respect to the inflation target," he said.

Bullard noted that the risk of asset price bubbles in the U.S. fell.