* U.S. inflation contained but could become risk - Bullard * Adds Europe not big enough shock to derail global recovery (Adds details, direct quote)

By Stanley White

TOKYO, June 14 (Reuters) - Europe's sovereign debt crisis has not pushed back the timing of a hike in the Federal Reserve's benchmark interest rate, St. Louis Federal Reserve Bank President James Bullard said on Monday.

Bullard, a voting member of the Fed's rate-setting panel, also said that U.S. inflation is contained now but could become a risk in the midterm due to the large U.S. budget deficit and the Fed's ultra-easy monetary policy.

Europe has not changed the idea of when we will move the federal funds rate, Bullard told reporters at a briefing.

Europe isn't a big enough of a shock to derail the global economy.

The Federal Open Market Committee, the Fed's policy-setting panel, next meets on June 22-23. The Fed's target for its benchmark federal funds rate is zero to 0.25 percent.

Bullard has issued warnings before that the Fed's pledge to maintain unusually low rates for an extended period could, if misread, perpetuate the boom and bust cycle that plunged the United States and the world into recession.

He has also has emerged as an advocate for quickly shrinking the Fed's extensive quantitative easing efforts by selling off some of the mortgage-related debt the central bank has bought to stabilise the financial system and pull the economy out of the worst financial crisis since the Great Depression.

The consensus view at the Fed, reflected by Fed Chairman Ben Bernanke, is that its bloated balance sheet will shrink naturally as the assets mature or are paid off. (Writing by Leika Kihara; Editing by Joseph Radford)

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