In a conference call with reporters following the release of the position paper, Bullard said the mismatch between Fed and investor expectations for the fed funds rate is eroding the central bank's credibility and causing distortions in the market.
The Fed's forecast for the pace of rate increases has consistently been above market expectations. Bullard said the Fed should lift rates once by the end of the year, but added that he prefers to wait until policymakers can hike on good news.