The Federal Reserve should keep interest rates on hold for some time after it completes its bond buying to assess its impact on the economy, St. Louis Fed President James Bullard said on Friday.

Speaking to a group of business executives, Bullard argued that the U.S. central bank might consider resorting to the past practice of leaving policy steady for some time before reversing course.

This gives the committee more time to assess economic conditions, Bullard said in prepared slides of his remarks made available to reporters in Washington before the speech.

Bullard said in the current environment, such a holding pattern would consist in keeping official borrowing costs near zero and leaving intact current language in the Fed's statement promising very low rates for an extended period.

In November, the Fed launched a $600 billion second round of bond purchases or quantitative easing that became known simply as QE2.

Bullard said he was not too worried that the recent spike in energy prices would hurt the economy in any significant way.

Increases in oil prices like the ones we have recently experienced have occurred many times in the past without seeming to have much effect on the economy, Bullard said.

At the same time, he urged policymakers to focus not just on price measures that exclude food and energy, so-called core inflation, but also on the overall numbers that better reflect the everyday experience of consumers.

Headline inflation is the ultimate objective of monetary policy with respect to prices, Bullard said.

The Fed's implicit target on inflation is 2 percent or a bit below. The consumer price index jumped 2.7 percent in the 12 months to March, but the core reading rose just 1.2 percent in the same period.

On the other side of the Fed's mandate, the latest employment data offered some reason for encouragement. The U.S. economy created 244,000 jobs in April, much higher than economists' forecasts and the strongest reading in 11 months.

However, the jobless rate, which is derived from a separate survey, rose 0.2 percentage point to 9 percent.

In response to signs of economic weakness late last year, the Fed embarked on a program of $600 billion in bond purchases, a move that proved controversial.

U.S. economic growth was rapid in the fourth quarter but slowed significantly in the first three months of the year to a 1.8 percent annualized rate.

Federal reserve