TOKYO — St. Louis Federal Reserve Bank president James Bullard said yesterday in Tokyo that he is less concerned now about possible deflation in the U.S. in the wake of the global financial crisis and ensuing recession.

As the U.S. and global economies have moved out of the recession “we have turned the corner of this issue,” he told an economic seminar at the Institute of Regulation and Risk North Asia.

Bullard added that it’s a different story in Japan, which has been mired in years of stubborn price drops.

He said U.S. core inflation has drifted down “a little bit” in recent months due largely to a decline in imputed rents, which are more difficult to calculate accurately in the troubled U.S. housing market.

“The U.S. housing sector is obviously very distorted at this point in time and even more distorted than usual,” he said.

“I think that part is pushing down the core inflation measure to some degree,” he added. “And for that reason, I’m not as worried about the deflationary scenario.”

The U.S. public’s long-term inflation expectations are over 2%, Bullard said.

“Investors are expecting inflation in a five- to 10-year range actually above our implicit target,” he said.

He added that neither the European debt crisis nor a possible slowdown in Chinese growth are likely to derail the global economic recovery.

However, Bullard said, “Irresponsibly high deficit and debt levels are not helping the U.S. economy and could damage future prospects through a loss of credibility internationally.

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